I need help with the questions below for Inventory Costing Methods-Periodic Method 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:UnitUnitsUnitsCost Purchased SoldFeb.2400Apr.6$721,800July 101,600Aug.976800Oct.23800Dec.30791,2002:17 PM口O St T2/5/2021 Requireda. Assume that Chen uses the first-in, first-out method. Compute the cost of goods sold for 2012 and the ending inventorybalance 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 inventorybalance 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 inventorybalance 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 Inventory24Cost of Goods Sold $b. Last-in, first-out:Ending Inventory$4Cost of Goods Sold $c. Weighted AverageEnding Inventory2:16 PMCost of goods sold $2/5/2021

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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I need help with the questions below for Inventory Costing Methods-Periodic Method

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

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

Expert Solution

Step 1

Meaning of FIFO Method :-

FIFO stands for “First-In, First-Out”. The FIFO method assumes that the oldest products in a company’s inventory have been sold first. The costs paid for those oldest products are the ones used in the calculation.

Statement for Calculation of Cost of Goods Sold

Particulars Units Rate Amount

Sold Feb 2	400	70	28000
Sold July 10	600	70	42000
Sold July 10	1000	72	72000
Sold Oct 23	800	72	57600
		Total	$199,600

Statement for Calculation of Ending Inventory Balance

Particulars	Units	Rate	Total
Opening Inventory	1000	70	70000
Sold Feb 2	400	70	28000
Balance	600	70	42000
Purchase Apr 6	1800	72	129600
Balance	2400		171600
Sold July 10	600	70	42000
Sold July 10	1000	72	72000
Balance	800		57600
Purchase `Aug 9	800	76	60800
Balance	1600		118400
Sold Oct 23	800	72	57600
Balance	800		60800
Purchase Dec 30	1200	79	94800
Balance	2000		$155,600

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