Brief Exercise 6-5 Calculate ending Inventory and cost of goods sold using FIFO (L06-3) During the…
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Question “Brief Exercise 6-5 Calculate ending Inventory and cost of goods sold using FIFO (L06-3) During the…”
Answer
Case 1)
1) calculate ending inventory and cost of goods sold
under( FIFO METHOD)
Cost of goods sold
Date | Particular | No of units | Unit cost | amount($) |
Jan 1, 2008 | beginning inventory | 40 | $68 | 2720 |
May 5th | Purchases | 270 | $71 | 19170 |
Nov 3rd | Purchases | 180 | $76 | 13680 |
Cost of goods sold | 490 | 35570 |
2) calculate ending inventory(under FIFO
METHOD)
Ending inventory = beginning INVENTORY + purchases-
unit’s sold
=40+(270+220)-490= 40
40 × $76= $3040
Ending inventory =. $3040
Case 2) calculation cost of goods sold and ending
inventory (LIFO METHOD)
COST OF GOODS SOLD
Date | Particular | unit’s | Unit cost | amount($) |
Jan 1, | Start | 15 | $81 | 1215 |
May 5, | Purchases | 245 | $84 | 20580 |
Nov 3 | Purchases | 190 | $89 | 16910 |
Cost of goods sold | 450 | 38705 |
Ending inventory(LIFO METHOD)
50+(245+190)-450 = 35UNITS
BECAUSE WE USING LIFO METHOD , ENDING INVENTORY WILL BE
IN BEGINNING BALANCE (JAN1ST) THEREFORE,.
35UNITS ×$81 =$2835
Ending inventory = $2835
Case 3) calculation of cost of goods sold and ending
inventory under specific identification method
Cost of goods sold
Date | Particular | UNIT | Unit cost | Price ($) |
Jan 1, | beginning inventory | 50 | $64 | 3200 |
May 5, | Purchases | 275 | $67 | 18425 |
Nov 3 | Purchases | 225 | $72 | 16200 |
Cost of goods sold | 550 | 37825 |
Ending inventory(under specific identification
method)
Date | Particular | UNIT | Unit cost | Price ($) |
Jan 1, | Start balance | 0 | – | – |
May5 | Purchases | 15 | $67 | 1005 |
Nov 3 | Purchases | 15 | $72 | 1080 |
Ending inventory | 30 | 2085 |
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