Applying and Analyzing Inventory Costing Methods At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $32. A summary of purchases during the current period follows. Units Unit Cost Cost Beginning Inventory 1,000 $32 $32,000 Purchase #1 1,800 34 61,200 Purchase #2 800 38 30,400 Purchase #3 1,200 41 49,200 During the current period, Chen sold 2,800 units. (a) Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Use the financial statement effects template to record cost of goods sold for the period. Ending inventory balance $Answer Cost of goods sold $Answer Use negative signs with answers, when appropriate. Balance Sheet Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital Record FIFO cost of goods sold Answer Answer Answer Answer Answer Income Statement Revenue - Expenses = Net Income Answer Answer Answer (b) Assume that Chen uses the last-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Ending inventory balance $Answer Cost of goods sold $Answer (c) Assume that Chen uses the average cost method. Compute both cost of good sold for the current period and the ending inventory balance. Ending inventory balance $Answer Cost of goods sold $Answer

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.10MCP: Comparison of Inventory Costing Methodsâ€”Periodic System Bitten Companys inventory records show 600...

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Applying and Analyzing Inventory Costing Methods
At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $32. A summary of purchases during the current period follows.

	Units	Unit Cost	Cost
Beginning Inventory	1,000	$32	$32,000
Purchase #1	1,800	34	61,200
Purchase #2	800	38	30,400
Purchase #3	1,200	41	49,200

During the current period, Chen sold 2,800 units.

(a) Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Use the financial statement effects template to record cost of goods sold for the period.
Ending inventory balance $Answer

Cost of goods sold $Answer

Use negative signs with answers, when appropriate.

	Balance Sheet
Record FIFO cost of goods sold	Answer		Answer		Answer		Answer		Answer

Balance Sheet

Transaction

Cash Asset

Noncash

Assets

Liabilities

Contributed

Capital

Earned

Capital

Record FIFO cost of goods sold

Answer

Income Statement
Answer		Answer		Answer

Income Statement

Revenue

Expenses

Net

Income

Answer

(b) Assume that Chen uses the last-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance.
Ending inventory balance $Answer

Cost of goods sold $Answer

(c) Assume that Chen uses the average cost method. Compute both cost of good sold for the current period and the ending inventory balance.
Ending inventory balance $Answer

Cost of goods sold $Answer

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