ercise World began January with merchandise inventry of 90 c

ercise World began January with merchandise inventry of 90 crates of vitamins that cost a total of $5,850. During the month Esercise World purchased and sold merchandise on account as follows Description Date Jan 2 Jan 5 Jan 16 Jan 27 Purchase Sale Quantity 130 crates 576 each 140 crates 5100 eaclh 170 crates @ $86 Sale 180 crates 5104 each Required: Calculate the value of (i) ending inven assumptions, following a periodic inventory approach. tory, (ii) cost of goods sold and, (ili) gross profit using the LIFO and Average cost flow LIFO-GP LIFO-E LIFO-COGS Avg.GP Avg-COGS Avg-EI

Solution

1.LIFO METHOD INVENTORY SCHEDULE

No

Qty Purchased

Unit Cost

Total Cost

Qty Sold

Unit cost

Total cost

Inv.Qty

Unit Cost

Total cost

Opening balance

90

65

5850

Jan 2

130

76

9880

90

65

5850

130

76

9880

Jan 5

130

76

9880

80

65

5200

10

65

650

Jan 16

170

86

14620

80

65

5200

170

86

14620

Jan 27

170

86

14620

70

65

4550

10

65

650

TOTAL

25800

4550

Cost of goods sold                   =        $ 25800

Ending Inventory                     =       $ 4550

Gross profit= Sales – Cost of goods sold

=(140*100+180*104)-25800

=32720-25800

=6920

2.WEIGHTED AVERAGE INVENTORY SCHEDULE

No

Qty Purchased

Unit Cost

Total Cost

Qty Sold

Unit cost

Total cost

Inv.Qty

Unit Cost

Total cost

Opening balance

90

65

5850

Jan 2

130

76

9880

90

65

5850

130

76

9880

Jan 5

140

71.5*

10010

80

71.5

5720

Jan 16

170

86

14620

80

71.5

5720

170

86

14620

Jan 27

180

81.36**

14644.8

70

81.36

5695.2

TOTAL

24654.8

5695.2

Cost of goods sold                   =        $ 24654.8

Ending Inventory                     =       $ 5695.2

Gross profit= Sales – Cost of goods sold

=(140*100+180*104)-24654.8

=8065.2

???

No	Qty Purchased	Unit Cost	Total Cost	Qty Sold	Unit cost	Total cost	Inv.Qty	Unit Cost	Total cost
Opening balance							90	65	5850
Jan 2	130	76	9880				90	65	5850
							130	76	9880
Jan 5				130	76	9880	80	65	5200
				10	65	650
Jan 16	170	86	14620				80	65	5200
							170	86	14620
Jan 27				170	86	14620	70	65	4550
				10	65	650
TOTAL						25800			4550