Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	50 units @ $130 per unit
Mar. 10	Purchase	70 units @ $138 per unit
Aug. 30	Purchase	10 units @ $144 per unit
Dec. 12	Purchase	70 units @ $146 per unit

There are 60 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods, presenting your answers in the form below. Round the average cost per unit to the nearest cent and round your final answers to the nearest whole dollar.

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Schedule of Cost of Merchandise Inventory and Cost of Merchandise Sold
Inventory Method		Merchandise Inventory		Merchandise Sold
a. FIFO		$ Correct 8		$ Correct 9
b. LIFO		Correct 11		Correct 12
c. Average cost		Correct 14		Correct 15

Depreciation by Two Methods

A tractor acquired on January 9 at a cost of $99,000 has an estimated useful life of six years. Assume that it will have no residual value.

a. Determine the depreciation for each of the first two years by the straight-line method.

	Depreciation
First year	$
Second year	$

b. Determine the depreciation for each of the first two years by the double-declining-balance method.

	Depreciation
First year	$
Second year	$