b. Assume that Chen uses the last-in, first-out method. Compute the cost of goods sold for 2012 and the ending inventory balance at December 31, 2012, for product A. C. Assume that Chen uses the weighted-average cost method. Compute the cost of goods sold for 2012 and the ending inventor balance at December 31, 2012, for product A.
b. Assume that Chen uses the last-in, first-out method. Compute the cost of goods sold for 2012 and the ending inventory balance at December 31, 2012, for product A. C. Assume that Chen uses the weighted-average cost method. Compute the cost of goods sold for 2012 and the ending inventor balance at December 31, 2012, for product A.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
I am sorry I still need help with b and c. The answers I received earlier was incorrect. Thank you
Transcribed Image Text:Required
a. Assume that Chen uses the first-in, first-out method. Compute the cost of goods sold for 2012 and the ending inventory
balance at December 31, 2012, for product A.
b. Assume that Chen uses the last-in, first-out method. Compute the cost of goods sold for 2012 and the ending inventory
balance at December 31, 2012, for product A.
C. Assume that Chen uses the weighted-average cost method. Compute the cost of goods sold for 2012 and the ending inventory
balance at December 31, 2012, for product A.
Do not round until your final answers. Round your answers to the nearest dollar.
a.
First-in, First-out:
Ending Inventory
24
Cost of Goods Sold $
b. Last-in, first-out:
Ending Inventory
$4
Cost of Goods Sold $
c. Weighted Average
Ending Inventory
2:16 PM
Cost of goods sold $
2/5/2021
Transcribed Image Text:Inventory Costing Methods-Periodic Method Chen Sales Corporation uses the periodic inventory system. On January 1, 2012,
Chen had: 1,000 units of product A with a unit cost of $70 per unit. A summary of purchases and sales during 2012 follows:
Unit
Units
Units
Cost Purchased Sold
Feb.2
400
Apr.6
$72
1,800
July 10
1,600
Aug.9
76
800
Oct.23
800
Dec.30
79
1,200
2:17 PM
口
O St T
2/5/2021
Expert Solution
Step 1
LIFO means last in first out where as FIFO means first in first out.
Inventory and cost of goods sold can be value on the basis of FIFO or LIFO basis.
In LIFO , cost of goods sold is valued at latest price and closing inventory at oldest price.
In weighted average , quantity is taken as weighted and price is calculated accordingly.
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