EX 7-8 Periodic inventory by three methods

The units of an item available for sale during the year were as follows:

Jan. 1                      Inventory           9 units at $360
Feb. 17                   Purchase           18 units at $414
July 21                   Purchase           21 units at $468
Nov. 23                  Purchase           12 units at $495

There are 16 units of the item in the physical inventory at December 31. The periodic
inventory system is used. Determine the inventory cost by (a) the first-in, first-out method,
(b) the last-in, first-out method, and (c) the average cost method.

Answer:
a. $7,812 (12 units at $495 plus 4 units at $468) = $5,940 + $1,872
b. $6,138 (9 units at $360 plus 7 units at $414) = $3,240 + $2,898
c. $7,056 (16 units at $441; $26,460/60 units = $441)
     Cost of merchandise available for sale:
             9 units at $360........................................................ $ 3,240
           18 units at $414........................................................ 7,452
           21 units at $468........................................................ 9,828
          12 units at $495........................................................   5,940
          60 units (at average cost of $441) .......................... $26,460

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