Aircard Corporation tracks the number of units purchased and

Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a periodic inventory system. The following are the transactions for the month of July July 1Beginning Inventory July 5 Sold July 13 Purchased July 17 Sold July 25 Purchased July 27 Sold Units Unit Cost 2,000 $40 1,000 6,000 3,000 8,000 5,000 50 Calculate the cost of goods available for sale, ending inventory, and cost of goods sold if Aircard uses (a) FIFO, (b) LIFO, or (c) weighted average cost. (Round \"Cost per Unit\" to 2 decimal places.) Weighted Average Cost FIFO LIFO Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold

Solution

FIFO LIFo Weighted Average Cost Costs of goods available for sale $ 7,44,000 $ 7,44,000 $                7,44,000 Ending Inventory $ 3,50,000 $ 3,00,000 $                3,25,500 Cost of goods sold $ 3,94,000 $ 4,44,000 $                4,18,500 Working: a. Unit Unit Costs Total July 1 Beginning Inventory           2,000 $             40 $                   80,000 July 13 Purchsed           6,000 $             44 $                2,64,000 July 25 Purchsed           8,000 $             50 $                4,00,000 Costs of goods available for sale         16,000 $                7,44,000 Units sold           9,000 (1000+3000+5000) Ending Inventory           7,000 b. FIFO Method, Goods sold from, July 1 Beginning Inventory           2,000 $             40 $                   80,000 July 13 Purchsed           6,000 $             44 $                2,64,000 July 25 Purchsed           1,000 $             50 $                   50,000 Total           9,000                    3,94,000 Costs of Ending Inventory = Costs of goods available for sale - Costs of goods sold = $ 7,44,000 -                    3,94,000 = $ 3,50,000 b. LIFO Metthod, Goods sold from, July 13 Purchsed           1,000 $             44 $                   44,000 July 25 Purchsed           8,000 $             50 $                4,00,000 Total $                4,44,000 Costs of Ending Inventory = Costs of goods available for sale - Costs of goods sold = $ 7,44,000 -                    4,44,000 = $ 3,00,000 c. Weighted Average method, Weighted Average cost per unit = $ 7,44,000 /               16,000 = $       46.50 Costs of goods sold =           9,000 x $             46.50 = $       4,18,500 Costs of Ending Inventory =           7,000 x $             46.50 = $       3,25,500