A corporation uses the periodic inventory system. On December 31, 2022, the accounting records the following inventory: Transactions Units Unit Cost Beginning inventory, Jan. 1 Transaction during the year 1. Purchase, Jan 30 1. Purchase, May 1 400 300 300 460 1. Sales for 2022 (sold for 5.00 each) (160) 340 400 Compute the ending inventory and cost of goods sold at Dec. 31, 2022 using costing method and round to the nearest peso: a. Average cost b. First-in, first-out c. Last-in, last-out
A corporation uses the periodic inventory system. On December 31, 2022, the accounting records the following inventory: Transactions Units Unit Cost Beginning inventory, Jan. 1 Transaction during the year 1. Purchase, Jan 30 1. Purchase, May 1 400 300 300 460 1. Sales for 2022 (sold for 5.00 each) (160) 340 400 Compute the ending inventory and cost of goods sold at Dec. 31, 2022 using costing method and round to the nearest peso: a. Average cost b. First-in, first-out c. Last-in, last-out
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:### Periodic Inventory System Example
A corporation uses the periodic inventory system. On December 31, 2022, the accounting records the following inventory:
| Transactions | Units | Unit Cost |
|-------------------------------|-------|-----------|
| Beginning inventory, Jan. 1 | 400 | 300 |
#### Transactions During the Year:
1. **Purchase, Jan 30**
- Units: 300
- Unit Cost: 340
2. **Purchase, May 1**
- Units: 460
- Unit Cost: 400
3. **Sales for 2022**
- Units Sold: (160)
- Sold for 5.00 each
### Tasks
Compute the ending inventory and cost of goods sold at December 31, 2022, using the following costing methods and round to the nearest peso:
a. **Average Cost**
b. **First-in, First-out (FIFO)**
c. **Last-in, Last-out (LIFO)**
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Step 1: Introducing Inventory Valuation
VIEWStep 2: Calculate the Cost of Goods Sold & Ending Inventory Using Average Cost Method
VIEWStep 3: Calculate the Cost of Goods Sold & Ending Inventory Using FIFO Method
VIEWStep 4: Calculate the Cost of Goods Sold & Ending Inventory Using LIFO Method
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