Exercise 6.5 (this is also in your book). Mather sells a snowboard popular with snowboard enthusiasts. Mather's beginning inventory and purchases of snowboards during SEPT are below. During the same month, 102 snowboards were sold. Mather uses a periodic inventory system. Date Explanaton Units Unit Cost Total Cost Sept 01 Beginning INV 12 $ 100 1,200 Sept 12 Purchase 103 4,635 Sept 19 Purchase 50 104 5,200 Sept 26 Purchase 20 105 2,100 Totals 127 13,135 45 Instructions Using the above figures, calculate the ending inventory at SEPT 30 and the Cost of Goods Sold using the FIFO, LIFO, and Average cost methods. (Note: round weighted- average unit cost to three decimal places.) Then PROVE IT using tables below! FIFO Ending Inventory Calculation Date Units Unit Cost Total Cost Cost of Goods Sold Instructions Using the above figures, calculate the ending inventory at SEPT 30 and the Cost of Goods Sold using the FIFO, LIFO, and Average cost methods. (Note: round weighted- average unit cost to three decimal places.) Then PROVE IT using tables below! FIFO Ending Inventory Calculation Units Unit Cost Total Cost Date Cost of Goods Sold Cost of Goods Avail for Sale 13,135 Less: Ending Inventory 25 Cost of Goods Sold Instructor Notes: 127 units could have been sold But 102 units were sold So END INVIS 25 units (127 - 102) Calculate the END INV SS before you calculate CGS (cost of goods sold) Using "First in means END INV (the 25 units) is made up of the newest units (latest purchase date) as in ... 20 units of last purchase (latest date) PLUS 5 units from prior purchase TO PROVE IT: In FIFO the 102 units sold must consist of the 12 oldest units (they are first in" the INV) so 102 - 12 beg iny = 90 units) 90 - 45 units (prior purchase) = 45 units left to account for 45 - 45 from next prior purchase (which will leave 5 for the ending inventory) CGS PROOF (FIFO) Date Units Units Cost Beg 9/01 12 100 Total Cost 1,200 102 10,515 Make sure your amt above is the same LIFO Ending Inventory Calculation Date Units Unit Cost Total Cost Cost of Goods Sold 13,135 Cost of Gds Avail for Sale Less: Ending Inventory Cost of Goods Sold 25 CGS PROOF (LIFO) Date Units Units Cost Total Cost 25 Cost of Goods Sold CGS PROOF (LIFO) Date Units Units Cost Total Cost 102 10,596 FYI: Averages ... a "math refresher": Purch #1 1 unit $1 ea Purch 2 2 units $2 ea Purch 113 3 units $3 ea 3 purchases 6 units $1 $4 $9 $14 To calculate a simple average you take $14/3 purchases 4.67 per purchase To calculate a weighted average lake $14/6 units 2 33 per unit 9 Weighted Average Unit Cost Calculation Total Cost Total Units Wid-Avg Unit Cost (to 3 decimal places) Weighted Average Unit Cost Calculation Total Cost Total Units Wtd-Avg Unit Cost (to 3 decimal places) 11 WEIGHTED - AVERAGE End Iny X Unit Cost = 13,135 Cost of Gds Avail for Sale Less: Ending Inventory Cost of Goods Sold
