Question

Wooderson Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Wooderson Company uses the periodic inventory system. Purchases Sales Units Unit Cost Units Selling Price/Unit 3/1 Beginning inventory 100 $40 3/3 Purchase 60 $50 3/4 Sales 60 $80 3/10 Purchase 200 $55 3/16 Sales 70 $90 3/19 Sales 90 $90 3/25 Sales 60 $90 3/30 Purchase 40 $60

Instructions (a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. (b) Using the weighted-average method, calculate the amount assigned to the inventory on hand on March 31. (c) Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31.

Answer 1

Answer:

FIFO COST OF GOODS SOLD$ 239,200

b) Weighted Average Inventory $ 6120

c) LIFO Ending Inventory =  $ 5000

Explanation:

Wooderson Company

Periodic inventory system

                                         Units         Unit Cost      Total Cost  

3/1 Beginning inventory      100              $40           $ 4000

3/3 Purchase                       60               $50           $ 3000

3/4 Sales                             60                  $80        $ 4800

3/10 Purchase                           200          $55      $ 11000

3/16 Sales                                  70             $90       $ 6300

3/19 Sales                               90              $90        $ 8100

3/25 Sales                              60               $90       $ 5400

3/30 Purchase                       40                $60         $ 2400

Sales = $ 4800 + $ 6300 + $ 8100 + $ 5400= $ 246,000

Ending Inventory= 120 units

FIFO Ending Inventory= $ 6800

 40 units at  $60  = $ 2400

80  units at     $55 = $ 4400

FIFO COST OF GOODS SOLD= SALES Less FIFO Ending Inventory

                                               = $ 246,000- $ 6800= $ 239,200

b) Weighted Average Inventory= (Total Cost / Total Units) Ending Units= (20,400/ 400) * 120 = $ 6120

c) LIFO Ending Inventory =  $ 5000

100  units at   $40  =         $ 4000

20 units at  $ 50= $ 1000