3) Pencil Company had the following information for the year: Inventory, January 1 Inventory Purchases March September November Inventory, December 31 Units Cost per Unit 20 $2 4 9 2 3 $2.50 $3 $3.50 a) How many units did Pencil sell during the year? b) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS, using the FIFO method. c) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS, using the LIFO method. d) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS, using the average cost method.
3) Pencil Company had the following information for the year: Inventory, January 1 Inventory Purchases March September November Inventory, December 31 Units Cost per Unit 20 $2 4 9 2 3 $2.50 $3 $3.50 a) How many units did Pencil sell during the year? b) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS, using the FIFO method. c) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS, using the LIFO method. d) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS, using the average cost method.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:3) Pencil Company had the following information for the year:
Inventory, January 1
Inventory Purchases
March
September
November
Units Cost per Unit
20 $2
4
2
Inventory, December 31 3
$2.50
$3
$3.50
a) How many units did Pencil sell during the year?
b) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS,
using the FIFO method.
c) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS, using
the LIFO method.
d) Calculate the dollar value of Pencil's December 31 inventory, as well as Pencil's COGS,
using the average cost method.
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Step 1: Methods of Inventory valuation :
VIEWStep 2: 1) Calculation of number of units sold during the year by the Pencil company :
VIEWStep 3: 2) Calculation of ending inventory and COGS using FIFO method :
VIEWStep 4: 3) Calculation of ending inventory and COGS using LIFO method
VIEWStep 5: 4) Calculation of ending inventory and COGS using Average cost method :
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