A company began January with 7,000 units of its principal product. The cost of each unit is $6. Inventory transactions for the month of January are as follows: Date of Purchase Units January 10 6,000 Purchases Unit Cost $ 7 Total Cost January 18 7,000 $ 42,000 56,000 Totals 13,000 $ 98,000 *Includes purchase price and cost of freight. Sales Date of Sale Units January 5 3,000 January 12 3,000 January 20 4,000 Total 10,000 10,000 units were on hand at the end of the month. 2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
A company began January with 7,000 units of its principal product. The cost of each unit is $6. Inventory transactions for the month of January are as follows: Date of Purchase Units January 10 6,000 Purchases Unit Cost $ 7 Total Cost January 18 7,000 $ 42,000 56,000 Totals 13,000 $ 98,000 *Includes purchase price and cost of freight. Sales Date of Sale Units January 5 3,000 January 12 3,000 January 20 4,000 Total 10,000 10,000 units were on hand at the end of the month. 2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A company began January with 7,000 units of its principal product. The cost of each unit is $6. Inventory transactions for
the month of January are as follows:
Date of Purchase
Units
January 10
6,000
Purchases
Unit Cost*
$7
Total Cost
January 18
7,000
8
$ 42,000
56,000
Totals
13,000
$ 98,000
* Includes purchase price and cost of freight.
Sales
Date of Sale
Units
January 5
3,000
January 12
3,000
January 20
4,000
Total
10,000
10,000 units were on hand at the end of the month.
2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO
Ending Inventory - Periodic LIFO
LIFO
Number Cost per
of units unit
Cost of
Goods
Available for
Sale
Number of
units sold
Cost per
unit
Cost of
Goods Sold
Number of
units in
ending
Cost per
unit
Ending
Inventory
inventory
Beginning Inventory
Purchases:
7,000 $6.00 $
42,000
$
6.00
$
6.00
January 10
January 18
6,000 $7.00
42,000
$
7.00
$
10
7.00
7,000 $ 8.00
56,000
$
8.00
$
8.00
Total
20,000
$
140,000
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