Eddings Company has a beginning inventory of 400 units of product XNAa at a cost of $8.00 per unit. During the year purchased were:
Feb.20.......600 units at$9
May5........ 500 units at $10
Aug 12....... 300 units at $11
Dec 8......... 200 units at $12
Eddings Company uses a Periodic in inventory system. Sales totaled 1,500 units.
Instructions.
1. Determined the cost of goods available for sale.
2. Determined (1) the ending inventory and 2 the cost of goods sold under each of the assumed cost flow method (Fifo, Lifo, and average). Proved the cost of goods sold under the Fifo and Lifo methods.
3. Which cost flow methods results in (1) the lowest inventory amount for the balance sheet and (2) the lowest cost of goods sold for the income statement?
File name: Eddings-Company1.doc File type: application/msword Price: $7
SOLUTION
PREVIEW
1.
Determine the cost of goods available for sale.
|
Date
|
No. of units
|
Unit cost
|
Total cost
|
|
1-Jan
|
400
|
8
|
3200
|
|
20-Feb
|
600
|
9
|
5400
|
|
5-May
|
500
|
10
|
5000
|
|
12-Aug
|
300
|
11
|
3300
|
|
8-Dec
|
200
|
12
|
2400
|
File name: Eddings-Company1.doc File type: application/msword Price: $7
