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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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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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