Q32PGA_1 Futuristic Electronic Center beg... [FREE SOLUTION]

Chapter 6: Q32PGA_1 (page 369)

Futuristic Electronic Center began October with 65 units of merchandise inventory that cost $82 each. During October, the store made the following purchases:
Oct. 3 25 units @ $ 90 each
12 30 units @ $ 90 each
18 35 units @ $ 96 each
Futuristic uses the periodic inventory system, and the physical count at October 31 indicates that 80 units of merchandise inventory are on hand.
Requirements
1. Determine the ending merchandise inventory and cost of goods sold amounts for the October financial statements using the FIFO, LIFO, and weighted-average inventory costing methods.

Short Answer

Expert verified

	Inventory	COGS
FIFO	$7,410	$6,230
LIFO	$6,680	$6,960
Weighted Average	$7,040	$6,600

Step by step solution

Step-by-Step SolutionStep 1: Using FIFO under a periodic system

$Ending Inventory = Oct 18 Purchase value + Oct 12 Purchase value for 15 units = (35 脳 $ 96) + (30 脳 $ 90) + (15 脳 $ 90) = $ 3, 360 + $ 2, 700 + $ 1, 350 = $ 7, 410 Cost of goods sold = opening inventory value + Total purchase value - Ending inventory value = (65 脳 $ 82) + (25 脳 $ 90 + 30 脳 $ 90 + 35 脳 $ 96) - $ 7, 410 = $ 5, 330 + $ 8, 310 - $ 7, 410 = $ 6, 230$

Using LIFO under periodic system

$Ending inventory = Opening inventory value + Oct 3 Purchase value for 15 units = (65 脳 $ 82) + (15 脳 $ 90) = $ 5, 330 + $ 1, 350 = $ 6, 680 Cost of goods Sold = Opening inventory value + Total purchase value - Ending inventory value = (65 脳 $ 82) + (25 脳 $ 90 + 30 脳 $ 90 + 35 脳 $ 96) - $ 6, 680 = $ 5, 330 + $ 8, 310 - $ 6, 680 = $ 6, 960$

Using weighted average under periodic system

$Average cost = \frac{Opening inventory value + Total purchase value}{Total units for sale} = \frac{(65 脳 $ 82) + (25 脳 $ 90 + 30 脳 $ 90 + 35 脳 $ 96)}{65 + 25 + 30 + 35} = \frac{$ 5, 330 + $ 8, 310}{155} = $ 88$

$Ending inventory = Ending units 脳 Average cost = 80 脳 $ 88 = $ 7, 040 Cost of goods sold = opening inventory value + Total purchase value - Ending inventory value = (65 脳 $ 82) + (25 脳 $ 90 + 30 脳 $ 90 + 35 脳 $ 96) - $ 7, 040 = $ 5, 330 + $ 8, 310 - $ 7, 040 = $ 6, 600$

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NATURE FOODS GROCERY
Income Statements
Years Ended June 30, 2019 and 2018
	2019	2018
Net Sales Revenue	\( 134,000	\) 119,000
Cost of Goods Sold:
Beginning Merchandise Inventory	\(17,000	\)14,000
Net Cost of Purchases	78,000	67,000
Cost of Goods Available for Sale	95,000	81,000
Less: Ending Merchandise Inventory	18,000	17,000
Cost of Goods Sold	77,000	64,000
Gross Profit	57,000	55,000
Operating Expenses	26,000	21,000
Net Income	\( 31,000	\) 34,000

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Short Answer

Step by step solution

Step-by-Step SolutionStep 1: Using FIFO under a periodic system

Using LIFO under periodic system

Using weighted average under periodic system

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