### E7-5 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2**Background Context**Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1:| **Inventory, December 31, prior year** | Units | Unit Cost || ------------------------------------- | ----- | --------- | | Quantity | 1,830 | $5 || **For the current year:** | | || Purchase, March 21 | 5,120 | $7 || Purchase, August 1 | 2,980 | $8 || Inventory, December 31, current year | 4,100 | | #### Required:- Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods.- **Note:** "Average cost per unit" should be rounded to 2 decimal places and final answers should be computed to the nearest whole dollar amount.#### Calculation Table:| | **FIFO** | **LIFO** | **Average Cost** || ------------------- | ---------------- | ---------------- | ----------------- || Ending inventory | | | || Cost of goods sold | | | |### Explanation of Terms:- **FIFO (First-In, First-Out):** An inventory valuation method where the first items placed in inventory are sold first.- **LIFO (Last-In, First-Out):** An inventory valuation method where the last items placed in inventory are sold first.- **Average Cost Method:** An inventory valuation method where the cost of goods available for sale is divided by the total units available to calculate an average unit cost.### Example Detailed Solutions:To complete the table above, follow the steps below for each inventory costing method:#### FIFO Calculation:1. **Ending Inventory:** Determine which units remain at the end of the year, starting with the most recent purchases.2. **Cost of Goods Sold (COGS):** Calculate by using the oldest costs first.#### LIFO Calculation:1. **Ending Inventory:** Determine which units remain at the end of the year, starting with the older purchases.2. **Cost of Goods Sold (CO

The cost of goods sold is the cost of producing the goods, and it consists of direct materials,…

E7-5 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, prior year For the current year: 1,830 $5 Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 5,120 2,980 4,100 7 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.) - 00

E7-5 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, prior year For the current year: 1,830 $5 Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 5,120 2,980 4,100 7 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.) - 00

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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At the end of January of the current year, the records of Donner Company showed the following for a particular item that sold at $15.20 per unit: Transactions Units Inventory, January 1 Purchase, January 12. 560 Amount $1,792 540 Purchase, January 26 140 2,808 1,008 Sale Sale (420) (200) Required: 1a. Assuming the use of a periodic inventory system, compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. 1b. Assuming the use of a periodic inventory system, prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (c) LIFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. 2a. Between FIFO and…
E7-6 (Algo) Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Ending inventory Cost of goods sold FIFO Units Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year Required: Compute ending inventory and cost of goods sold under FIFO, LIFO, and average cost inventory costing methods. Note: Round "Average cost per unit" to 4 decimal places and final answers to nearest whole dollar amount. LIFO 1,920 Unit Cost $6 5 6,110 4,060 3 2,810 Average Cost
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Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Unit Units Cost Inventory, December 31, prior year. 1,860 $ 3 For the current year: Purchase, March 21 5,180 5 Purchase, August 1 Inventory, December 31, current year 2,980 4,030 6 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. Note: Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount. Ending inventory Cost of goods sold FIFO LIFO Average Cost
Subject: accounting
E7-16 (Supplement 7A) Calculating Cost of Ending Inventory and Cost of Goods Sold under Perpetual FIFO and LIFO (LO 7-51) Orlon Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method ols perpetually at the time of each sale, as if it uses perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Unit Cost $10 Units Transactions e. Inventory, Beginning For the yeari b. Purchase, April 11 C. Purchase, June 1 d. Sale, May 1 (sold for $38 per unit) e. Sale, July ) (sold for $38 per unit) f. Operating expenses (excluding incone tax expense), $19,300 300 700 8 600 11 300 550 Required: Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. FIFO LIFO Cost of Ending Inventory Cost of Goods Sold
3. Calculate the cost of goods sold dollar value for A74 Company for the sale on March 11, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average (AVG). Number of Units Unit Cost Beginning inventory Mar. 1 Purchased Mar. 8 Sold Mar. 11 for $120 per unit 110 $87 140 89 95
Spotter Corporation reported the following for June in its periodic inventory records. Description Units Unit Cost $11.60 12.60 14.60 Date June 1 Beginning 11 Purchase 24 Purchase 30 Ending Total Cost $139.20 630.00 554.80 12 50 38 42 Required: 1. Calculate the cost of ending inventory and the cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost methods. (Do not round your intermediate calculations. Round "Weighted Average Cost" to 2 decimal places.) Cost of Ending Cost of Goods Inventory Sold FIFO LIFO 517.20 806.80 Weighted Average Cost 2. Which of the three methods will lead to reporting the highest net income? O FIFO LIFO Weighted Average Cost %24 %24
Required information [The following information applies to the questions displayed below.] A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 310 units. Ending inventory at January 31 totals 130 units. Units Unit Cost $ 2.60 Beginning inventory on January 1 Purchase on January 9 Purchase on January 25 280 60 2.80 100 2.94 Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method. Perpetual FIFO: Cost of Goods Sold Goods purchased Inventory Balance # of units Date Cost per unit Cost per Cost of Goods unit Cost per Inventory Balance # of units # of units Sold unit sold January 1 January 9 Total January 9 Ianuani 2E
SE7-8. Inventory Costing Methods and the Periodic Method Lambeth Company experienced the fol- lowing events in January: Unit Cost Date Event Units Total Cost Jan. 10 Purchased inventory. Purchased inventory. 100 $12 $1,200 Jan. 20 200 14 2,800 Jan. 30 Sold inventory. 150 If the Lambeth Company uses the FIFO inventory costing method, calculate the company’s cost of goods sold and its ending inventory as of January 31 assuming the periodic method.