Eddings Company has a beginning inventory of 400 units of product

P6-3A Eddings Company has a beginning inventory of 400 units of product XNA at a cost of

FIN ACCT 557 P6-3A Eddings Company

P6-3A Eddings Company

Financial Accounting

Accounting Principles

Financial Accounting: Weygandt, Kieso, and Kimmel 5th Edition

Axia College of University of Phoenix (UoP)

Problem 6-3A Eddings Company has a beginning inventory of 400 units of product XNA 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?

SOLUTION

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

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