Computing cost of goods sold and ending inventory under FIFI, LIFO and average cost. Assume that Gode Company reports the following initial balances and subsequent purchases of inventory: Beginning inventory 2017 1,000 units@ 100 each $100,000.00Inventory purchased in 2017 2,000 units @150 each $300,000.00Cost of goods sold for sale in 2017 3,000 units $400,000.00Assume that 1,700 units sold during 2017. Compute the cost of goods sold for 2017 and the balance reported as ending inventory on its 2017 balance sheet under the following inventory costing methods: a. FIFOb. LIFOc. Average Cost

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Asked Nov 21, 2019
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Computing cost of goods sold and ending inventory under FIFI, LIFO and average cost.
Assume that Gode Company reports the following initial balances and subsequent purchases of inventory:
Beginning inventory 2017 1,000 units@ 100 each $100,000.00
Inventory purchased in 2017 2,000 units @150 each $300,000.00
Cost of goods sold for sale in 2017 3,000 units $400,000.00
Assume that 1,700 units sold during 2017. Compute the cost of goods sold for 2017 and the balance reported as ending inventory on its 2017 balance sheet under the following inventory costing methods:
a. FIFO
b. LIFO
c. Average Cost

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Expert Answer

Step 1

Requirement a)

Calculate the cost of goods sold and ending inventory using FIFO method:

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FIFO Ending Inventory Units Cost/unit Ending inventory 1,000 2,000 Particulars Cost of Goods available for sale Units Cost of Goods Sold Cost/unit COG for sale Units sold Cost/unit COGS $100 $150 Beginning Inventory Purchases: Sales $100,000 $300,000 $100,000 $300,000 $100 $150 1,000 2,000 $100 $100,000 $150 $112,500 1,300 $212,500 1,300 1,000 700 1,700 $195,000 $195,000 $150 3,000 $400,000 |TОTAL

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Step 2

Requirement b)

Calculate the cost of goods sold and ending inve...

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LIFO Cost of Goods available for sale Units 1,000 2,000 Ending Inventory Particulars Cost of Goods Sold Cost/unit COG for sale Units sold Cost/unit COGS $100 Units Cost/unit Ending inventory $100,000 $300,000 $45,000 $100,000 $145,000 Beginning Inventory Purchases: Sales $100 $100,000 1,000 2,000 $150 $255,000 300 $300,000| $150 $150 1,700 $150 1,000 $100 |ТOTAL 3,000 $400,000 1,700 $255,000 1,300

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