he following data are available for Sellco for the fiscal year ended on January 31, 2020: Sales 1,600 units Beginning inventory 500 units @ $ 4 Purchases, in chronological order 600 units @ $ 5 800 units @ $ 6 500 units @ $ 8 Required: a. Calculate cost of goods sold and ending inventory under the cost flow assumptions, FIFO, LIFO and weighted average (using a periodic inventory system): (Round unit cost to 2 decimal places.) b. Assume that net income using the weighted-average cost flow assumption is $80,000. Calculate net income under FIFO and LIFO. (Round unit cost to 2 decimal places.)
he following data are available for Sellco for the fiscal year ended on January 31, 2020:
| Sales | 1,600 | units | |||
| Beginning inventory | 500 | units | @ | $ | 4 |
| Purchases, in chronological order | 600 | units | @ | $ | 5 |
| 800 | units | @ | $ | 6 | |
| 500 | units | @ | $ | 8 | |
Required:
a. Calculate cost of goods sold and ending inventory under the cost flow assumptions, FIFO, LIFO and weighted average (using a periodic inventory system): (Round unit cost to 2 decimal places.)
b. Assume that net income using the weighted-average cost flow assumption is $80,000. Calculate net income under FIFO and LIFO. (Round unit cost to 2 decimal places.)
Calculation of COGS and ending inventory:
FIFO
COGS= (500*4)+(600*5)+(500*6)
=2000+ 3000 +3000
=$ 8000
Ending inventory= (300*6)+(500*8)
= 1800+4000
= $ 5800
LIFO
COGS= (500*8)+(800*6)+(300*5)
=4000+ 4800 +1500
=$ 10300
Ending inventory= (500*4)+(300*5)
= 2000+1500
= $ 3500
Weighted Average
Weighted average cost= Total Purchase cost/ Total units
= 13800/2400
= 5.75
COGS= 1600*5.75
= $9200
Ending inventory= 800*5.75
= $ 4600
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