Answered: Consider the following transactions for…

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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Question

Consider the following transactions for A67 Company for the month shown in chronological order:

	# of units	Unit cost	Sales
Beginning Inventory	800	$50
Purchased	600	$52
Sold	400		$80
Sold	350		$90
Ending Inventory	650

In the table below, calculate the dollar value for the period for each of the following items using the listed cost allocation methods and using perpetual inventory updating.

PLEASE NOTE: All dollar amounts will be rounded to whole dollars using "$" with commas as needed (i.e. $12,345), except for the Weighted Average cost per unit, which will be rounded to two decimal places and include "$".

Weighted average cost per unit = per unit.

Cost Allocation Method	Cost of Goods Available	Cost of Goods Sold	Ending Inventory	Sales	Gross Margin
First-in, First-out (FIFO)
Last-in, First-out (LIFO)
Weighted Average (AVG)

Expert Solution

Working:

	# of units	Unit cost	Total
Beginning Inventory	800	$50	$40,000
Purchased	600	$52	$31,200
	1,400
Cost of Goods Available			$71,200

	# of units	Sales per unit	Total sales
Sold	400	$80	$32,000
Sold	350	$90	$31,500
Total sales	750		$63,500

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