complete the following **PART 4 – Determine ending inventory and cost of goods sold under each of the 3 inventory costing methods.**| Date | Transactions | Units | Unit Cost | Total Cost ||-----------|----------------------|-------|-----------|------------|| June 1 | Beginning inventory | 16 | $350 | $5,600 || June 7 | Sale | 11 | | || June 12 | Purchase | 10 | 340 | 3,400 || June 15 | Sale | 12 | | || June 24 | Purchase | 10 | 330 | 3,300 || June 27 | Sale | 8 | | || June 29 | Purchase | 9 | 320 | 2,880 || | | | | **$15,180**|1. **Use the FIFO inventory costing method. Calculate BOTH the cost of goods sold and ending inventory amount.**2. **Use the LIFO inventory costing method. Calculate BOTH the cost of goods sold and ending inventory amount.**3. **Use the WEIGHTED AVERAGE inventory costing method. Calculate BOTH the cost of goods sold and ending inventory amount.**

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Description: complete the following **PART 4 – Determine ending inventory and cost of goods sold under each of the 3 inventory costing methods.**| Date | Transactions | Units | Unit Cost | Total Cost ||-----------|----------------------|-------|-----

Answered: PART 4 – Determine ending inventory and…

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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complete the following

**PART 4 – Determine ending inventory and cost of goods sold under each of the 3 inventory costing methods.**

| Date | Transactions | Units | Unit Cost | Total Cost |
|-----------|----------------------|-------|-----------|------------|
| June 1 | Beginning inventory | 16 | $350 | $5,600 |
| June 7 | Sale | 11 | | |
| June 12 | Purchase | 10 | 340 | 3,400 |
| June 15 | Sale | 12 | | |
| June 24 | Purchase | 10 | 330 | 3,300 |
| June 27 | Sale | 8 | | |
| June 29 | Purchase | 9 | 320 | 2,880 |
| | | | | **$15,180**|

1. **Use the FIFO inventory costing method. Calculate BOTH the cost of goods sold and ending inventory amount.**

2. **Use the LIFO inventory costing method. Calculate BOTH the cost of goods sold and ending inventory amount.**

3. **Use the WEIGHTED AVERAGE inventory costing method. Calculate BOTH the cost of goods sold and ending inventory amount.**

Expert Solution

Step 1

Inventory costing methods:

FIFO method: First in first out method means the items purchased first are sold or used first, that is the newest ones are still in stock. It means the least expensive units are charged to the cost of goods sold first which tends to be lower, which therefore leads more operating earnings and income taxes paid.

LIFO method: Last in first out method means the items purchased last are sold or used first, that is the oldest ones are still in stock. It means the cost of goods sold tends to be higher, which therefore leads to lower operating earnings and income taxes paid.

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