Gladstone Company tracks the number of units purchased and s

Gladstone Company 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 Assume its accounting records provided the following information at the end of the annual accounting period, December 31 Transactions Units Unit Cost Beginning inventory, January 1 Transactions during the year a. Purchase, January 30 b. Sale, March 14 ($100 each) c. Purchase, May 1 d. Sale, August 31 ($100 each) 1,500 $40 2,900 1,600 52 (1,150) 70 (1,600) Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May Required 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Amount of Goods Available for Sale Cost of Goods Sold Ending Inventory a. Last-in, first-out b. Weighted average cost C. First-in, first-out d. Specific identification

Solution

Amount of goods available for sale =

beginning inventory = 1500 * 40 = 60000

Add- Purchase on January 30 = 2900 *52 = 150800

Add- Purchase on May 1= 1600 *70 = 112000

Amount of goods available for sale = 322800

Amount of goods available for sale is same in all method

A)

Ending inventory under LIFO =

Beginning inventory = 1500 * 40 = 60000

Add- Purchase on January 30 = 1750 *52 = 91000

Ending inventory under LIFO = 151000

Cost of good sold = 1150 * 52 + 1600 * 70 = 171800

or 322800 - 151000 = 171800

B) Weighted average cost =

Add- Purchase on January 30

53.80

(322800/6000)

Ending inventory = 3250 * 53.80 = 174850

Cost of goods sold = 2750 * 53.80 = 147950

C) FIFO

Ending inventory under FIFO =

Beginning inventory = 1650 * 52 = 85800

Add- Purchase on January 30 = 1600 * 70 = 112000

Ending inventory under FIFO = 197800

Cost of good sold = 322800 - 197800 = 125000

d) Specific identification

ending inventory = (2900 - 690 - 560) * 52 + 1600 * 70 = 197800

Cost of good sold = 322800 - 197800 = 125000

Transaction	Unit	Unit cost	Total cost
beginning inventory	1500	40	60000
Add- Purchase on January 30	2900	52	150800
Add- Purchase on May 1	1600	70	112000
	6000	53.80 (322800/6000)	322800