**Inventory Management at Oahu Kiki**Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 260 units.| Date | Units | Unit Cost | Total Cost ||-------------|-------|-----------|------------|| Beginning Inventory | January 1 | 100 | $75 | $7,500 || Purchase | January 15 | 360 | $95 | $34,200 || Purchase | January 24 | 240 | $115 | $27,600 |**Required:**1. Calculate the number and cost of goods available for sale.2. Calculate the number of units in ending inventory.3. Calculate the cost of ending inventory and cost of goods sold using the: - (a) FIFO (First-In, First-Out) - (b) LIFO (Last-In, First-Out) - (c) Weighted Average Cost methods.

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Description: **Inventory Management at Oahu Kiki**Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu

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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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**Inventory Management at Oahu Kiki**

Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 260 units.

| Date | Units | Unit Cost | Total Cost |
|-------------|-------|-----------|------------|
| Beginning Inventory | January 1 | 100 | $75 | $7,500 |
| Purchase | January 15 | 360 | $95 | $34,200 |
| Purchase | January 24 | 240 | $115 | $27,600 |

**Required:**

1. Calculate the number and cost of goods available for sale.
2. Calculate the number of units in ending inventory.
3. Calculate the cost of ending inventory and cost of goods sold using the:
- (a) FIFO (First-In, First-Out)
- (b) LIFO (Last-In, First-Out)
- (c) Weighted Average Cost methods.

Expert Solution

Step 1: Explanation of all three methods

FIFO (First-In, First-Out) method: Inventory is sold in the order it was purchased, with the oldest items sold first.

LIFO (Last-In, First-Out) method: The most recently acquired inventory is sold first.

Weighted Average method: Inventory cost is determined by averaging the costs of all units, resulting in a consistent cost per unit.

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