Howard Ltds accounting records show the following for the month of June 2020.

Date Units Unit cost Total Cost

June 1 Inventory b/d 200 $5.0

12 Purchase 300 $6.4

24 Purchase 400 $7.0

25 Purchase 100 $6.8

Sales on June 27: 850 units sold to Sun Company on account, for a selling price of $26

Credit term for sale on account: 2/10, n/30. The customer paid on 30 June 2020.

Operating expenses for June: $12,700.

Required:

(a) Using the First-in first-out (FIFO) method

i.Calculate the cost of goods sold

ii.Calculate the amount of ending inventory

iii.Calculate the profit for June 2020

(b) Using the weighted-average method

i.Calculate the cost of goods sold

ii.Calculate the amount of ending inventory

iii.Calculate the profit for June 2020

Solution:

(a) The FIFO method

Cost of goods sold (850 units) =

Ending inventory (150 units) =

Profit for June 2020 = revenue cost of goods sold operating expense

(b) The weighted-average method

Average cost =

Cost of goods sold =

Ending inventory =

Profit for June =