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Inventory Costing Methods - Periodic Method Fortune Stores uses the periodic inventory system for its merchandise inventory. The April 1 inventory for one of the items in the merchandise inventory consisted of 120 units with a unit cost of $395. Transactions for this item during April were as follows: April 9 Purchased 40 units @ $415 per unit 14 Sold $620 per unit 80 units@ 23 Purchased 20 units @ $420 per unit 29 Sold 40 units Required a. Calculate the cost of goods sold and the ending inventory cost for the month of April using the weighted-average cost method. Do not round until your final answers. Round your final answers to the nearest dollar. b. Calculate the cost of goods sold and the ending inventory cost for the month of April using the first-in, first-out method. c. Calculate the cost of goods sold and the ending inventory cost for the month of April using the last-in, first-out method. a. Weighted Average Ending Inventory $ Cost of goods Sold $ b. First-in, First-out: x 0x Ending Inventory $ 25,000 Cost of Goods Sold: $ 47,400 c. Last-in, first-out: Ending Inventory $ 23,700 ✓ Cost of Goods Sold: $ 48,700

Inventory Costing Methods - Periodic Method Fortune Stores uses the periodic inventory system for its merchandise inventory. The April 1 inventory for one of the items in the merchandise inventory consisted of 120 units with a unit cost of $395. Transactions for this item during April were as follows: April 9 Purchased 40 units @ $415 per unit 14 Sold $620 per unit 80 units@ 23 Purchased 20 units @ $420 per unit 29 Sold 40 units Required a. Calculate the cost of goods sold and the ending inventory cost for the month of April using the weighted-average cost method. Do not round until your final answers. Round your final answers to the nearest dollar. b. Calculate the cost of goods sold and the ending inventory cost for the month of April using the first-in, first-out method. c. Calculate the cost of goods sold and the ending inventory cost for the month of April using the last-in, first-out method. a. Weighted Average Ending Inventory $ Cost of goods Sold $ b. First-in, First-out: x 0x Ending Inventory $ 25,000 Cost of Goods Sold: $ 47,400 c. Last-in, first-out: Ending Inventory $ 23,700 ✓ Cost of Goods Sold: $ 48,700

FINANCIAL ACCOUNTING
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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**Inventory Costing Methods - Periodic Method** Fortune Stores uses the periodic inventory system for its merchandise inventory. The April 1 inventory for one of the items in the merchandise inventory consisted of 120 units with a unit cost of $395. Transactions for this item during April were as follows: | April | Transaction | Units | Cost/Unit | |-------|-------------|-------|-----------| | 9 | Purchased | 40 | $415 | | 14 | Sold | 80 | $620 | | 23 | Purchased | 20 | $420 | | 29 | Sold | 40 | | **Required:** a. Calculate the cost of goods sold and the ending inventory cost for the month of April using the weighted-average cost method. Do not round until your final answers. Round your final answers to the nearest dollar. b. Calculate the cost of goods sold and the ending inventory cost for the month of April using the first-in, first-out method. c. Calculate the cost of goods sold and the ending inventory cost for the month of April using the last-in, first-out method. **Solutions:** a. **Weighted Average** - **Ending Inventory**: $25,000 - **Cost of Goods Sold**: $47,400 b. **First-in, First-out (FIFO)** - **Ending Inventory**: $23,700 - **Cost of Goods Sold**: $48,700 c. **Last-in, First-out (LIFO)** - **Ending Inventory**: $25,000 - **Cost of Goods Sold**: $47,400 The table explains the step-by-step calculations for ending inventory and cost of goods sold using the weighted-average, FIFO, and LIFO methods. Each method results in a different allocation of costs to ending inventory and cost of goods sold, demonstrating the impact of inventory costing methods on financial reporting.
Transcribed Image Text:**Inventory Costing Methods - Periodic Method** Fortune Stores uses the periodic inventory system for its merchandise inventory. The April 1 inventory for one of the items in the merchandise inventory consisted of 120 units with a unit cost of $395. Transactions for this item during April were as follows: | April | Transaction | Units | Cost/Unit | |-------|-------------|-------|-----------| | 9 | Purchased | 40 | $415 | | 14 | Sold | 80 | $620 | | 23 | Purchased | 20 | $420 | | 29 | Sold | 40 | | **Required:** a. Calculate the cost of goods sold and the ending inventory cost for the month of April using the weighted-average cost method. Do not round until your final answers. Round your final answers to the nearest dollar. b. Calculate the cost of goods sold and the ending inventory cost for the month of April using the first-in, first-out method. c. Calculate the cost of goods sold and the ending inventory cost for the month of April using the last-in, first-out method. **Solutions:** a. **Weighted Average** - **Ending Inventory**: $25,000 - **Cost of Goods Sold**: $47,400 b. **First-in, First-out (FIFO)** - **Ending Inventory**: $23,700 - **Cost of Goods Sold**: $48,700 c. **Last-in, First-out (LIFO)** - **Ending Inventory**: $25,000 - **Cost of Goods Sold**: $47,400 The table explains the step-by-step calculations for ending inventory and cost of goods sold using the weighted-average, FIFO, and LIFO methods. Each method results in a different allocation of costs to ending inventory and cost of goods sold, demonstrating the impact of inventory costing methods on financial reporting.
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