Practice Exercise 2 Chu Company had the following records on a product called "The Widget" in 2015. Units Unit Cost January 1 April 25 July 26 Beginning Inventory Purchase Purchase Purchase 100 200 300 250 October 3 By the year end, Chu Company had sold 670 widgets. $20 $26 $28 $30 a) Calculate the cost of goods sold and ending inventory, using the FIFO method of inventory valuation. b) Calculate the cost of goods sold and ending inventory, using the LIFO method of inventory valuation. c) Calculate the cost of goods sold and ending inventory, using the average cost method of inventory valuation.
Practice Exercise 2 Chu Company had the following records on a product called "The Widget" in 2015. Units Unit Cost January 1 April 25 July 26 Beginning Inventory Purchase Purchase Purchase 100 200 300 250 October 3 By the year end, Chu Company had sold 670 widgets. $20 $26 $28 $30 a) Calculate the cost of goods sold and ending inventory, using the FIFO method of inventory valuation. b) Calculate the cost of goods sold and ending inventory, using the LIFO method of inventory valuation. c) Calculate the cost of goods sold and ending inventory, using the average cost method of inventory valuation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Practice Exercise 2
Chu Company had the following records on a product called "The Widget" in 2015.
Units
Unit Cost
January 1
April 25
July 26
October 3
By the year end, Chu Company had sold 670 widgets.
Beginning Inventory
Purchase
Purchase
Purchase
100
200
300
250
$20
$26
$28
$30
a) Calculate the cost of goods sold and ending inventory, using the FIFO method of
inventory valuation.
b) Calculate the cost of goods sold and ending inventory, using the LIFO method of
inventory valuation.
c) Calculate the cost of goods sold and ending inventory, using the average cost
method of inventory valuation.
Transcribed Image Text:Unit 3, Activity 1, Practice Exercise 2
Chu Company
Cost of Goods Available for Sale (for all methods)
Units
a) FIFO
b) LIFO
Cost of Goods Sold
Ending Inventory
Cost of Goods Sold
Ending Inventory
c) Average Cost Method
Average Cost per Unit
= Total Cost/Number of Units
=
Cost of Goods Sold
Ending Inventory
= Unit cost x units sold
Units Unit Cost
Unit Cost
Units Unit Cost
= Unit cost x units in ending inventory
Total Cost
Total Cost
Total Cost
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