Financial Accounting Serial Problem: Kate's Cards

SP6. As expected, the holiday season was very busy for Kate and her greeting card company. In fact, most of her supplies were fully depleted by year-end, necessitating a restocking of inventory. Assume that Kate uses the periodic method of accounting for inventory and that her January beginning inventory was $0. The following transactions occurred for Kate's Cards during January of the New Year:

Purchases Units Unit Cost Total Cost

Jan.10................................................400 @ $3.00 per unit $1,200

Jan. 17...............................................500 @ $3.50 per unit $1,750

Jan. 23...............................................300 @ $4.00 per unit $1,200

Total...................................................1,200 $4,150

Sales

Jan.15...............................................360

Jan.21...............................................420

Jan.27...............................................380

Total..................................................1,160

Required

a. Calculate the company's cost of goods sold and value of ending inventory for the month of January using (1) FIFO, (2) LIFO and (3) the weighted-average cost method. Round the cost per unit to 3 decimals places and round your answers to the nearest dollar.

b. If the net realizable value of Kate's inventory is $4.00 per unit on January 31, what value should be reported for her ending inventory on the January 31 balance sheet under each of the three inventory costing methods?