Required: a. Compute the amount of goods available for sale. b. & c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in, first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two- fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.

Required: a. Compute the amount of goods available for sale. b. & c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in, first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two- fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.

Name: Kirtland Corporation uses a periodic inventory system. At the end of
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Description: Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, the accountingrecords for the most popular item in inventory showed the following:Assessment Tool iFrameTransactionsBeginning inventory,

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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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

Topic Video

Question

Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, the accounting
records for the most popular item in inventory showed the following:
Assessment Tool iFrame
Transactions
Beginning inventory, January 1
Transactions during the year:
a. Purchase, January 30
b. Purchase, May 1
c. Sale ($5 each)
d. Sale ($5 each)
Units
400
Unit Cost
$ 3.00
300
460
3.40
4.00
(160)
(700)
Required:
a. Compute the amount of goods available for sale.
b. & c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in,
first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two-
fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from
the remainder of the beginning inventory, with the balance from the purchase of May 1.
Complete this question by entering your answers in the tabs below.
Req A
Req B and C
Compute the amount of ending inventory and cost of goods sold at December 31 under Average cost, First-in, first-out, Last-
in, first-out, Specific identification of the inventory costing methods. For Specific identification, assume that the first sale was
selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second
sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.
Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.
Ending inventory
Cost of goods sold
Average Cost
First-In,
First-Out
Last-In, Specific
First-Out Identification
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Step 1: Introduction to various inventory valuation method :

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Step 2: Computation of cost of ending inventory & cost of goods sold using periodic Average Cost :

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Step 3: Computation of cost of ending inventory & cost of goods sold using periodic FIFO:

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Step 4: Computation of cost of ending inventory & cost of goods sold using periodic LIFO:

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Subject: acounting