Inventory Costing Methods—Perpetual Method Chou Sales Corporation uses the perpetual inventory system. On January 1, 2018, Chen had 1,000 units of product A with a unit cost of $20 per unit. A summary of purchases and sales during 2018 follows: Unit Cost Units Purchased Units Sold Feb.2 400 Apr.6 $22 1,800 July 10 1,600 Aug.9 25 800 Oct.23 800 Dec.30 28 1,400 Required a. Assume that Chou uses the first-in, first-out method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A. b. Assume that Chou uses the last-in, first-out method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A. c. Assume that Chou uses the weighted-average cost method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A. Do not round until your final answers. Round to the nearest
Inventory Costing Methods—Perpetual Method Chou Sales Corporation uses the perpetual inventory system. On January 1, 2018, Chen had 1,000 units of product A with a unit cost of $20 per unit. A summary of purchases and sales during 2018 follows: Unit Cost Units Purchased Units Sold Feb.2 400 Apr.6 $22 1,800 July 10 1,600 Aug.9 25 800 Oct.23 800 Dec.30 28 1,400 Required a. Assume that Chou uses the first-in, first-out method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A. b. Assume that Chou uses the last-in, first-out method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A. c. Assume that Chou uses the weighted-average cost method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A. Do not round until your final answers. Round to the nearest
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Inventory Costing Methods—Perpetual Method
Chou Sales Corporation uses the perpetual inventory system. On January 1, 2018, Chen had 1,000 units of product A with a unit cost of $20 per unit. A summary of purchases and sales during 2018 follows:
| Unit Cost |
Units Purchased |
Units Sold |
|
|---|---|---|---|
| Feb.2 | 400 | ||
| Apr.6 | $22 | 1,800 | |
| July 10 | 1,600 | ||
| Aug.9 | 25 | 800 | |
| Oct.23 | 800 | ||
| Dec.30 | 28 | 1,400 |
Required
a. Assume that Chou uses the first-in, first-out method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A.
b. Assume that Chou uses the last-in, first-out method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A.
c. Assume that Chou uses the weighted-average cost method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A. Do not round until your final answers. Round to the nearest dollar.
| a. | First-In, First-Out | |
| Ending Inventory | Answer
|
|
| Cost of goods Sold | Answer
|
|
| b. | Last-In, First-Out | |
| Ending Inventory | Answer
|
|
| Cost of Goods Sold | Answer
|
|
| c. | Weighted Average | |
| Ending Inventory | Answer
|
|
| Cost of Goods Sold | Answer
|
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