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Name: August 1 Inventory 400 units at P10 12 Pur
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Description: August 1 Inventory 400 units at P10 12 Purchase 600 units at P12 16 Issue 500 units 18 Purchase 300 units at P15 20 Issue 200 units 25 Purchase 400 units at P

Business

Accounting

Required: Compute for the cost of ending inventory and cost of goods sold using: a. FIFO b. Moving average c. Weighted average

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.

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Question

August 1 Inventory 400 units at P10
12 Purchase 600 units at P12
16 Issue 500 units
18 Purchase 300 units at P15
20 Issue 200 units
25 Purchase 400 units at P14
28 Issue 400 units

Required: Compute for the cost of ending inventory and cost of goods sold using:
a. FIFO
b. Moving average
c. Weighted average

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