# Cost Allocation and Lower-of-Cost-or-MarketDouglas Company's beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows:  UnitsUnit PriceTotal CostJanuary 1, 20--Beginning inventory1,100\$8.00     \$8,800    March 51st purchase900 9.00      8,100    April 162nd purchase400 9.50      3,800    June 33rd purchase700 10.25      7,175    August 184th purchase600 11.00      6,600    September 135th purchase800 12.00      9,600    November 146th purchase400 14.00      5,600    December 37th purchase500 14.05      7,025      5,400  \$56,700     There are 1,000 units of inventory on hand on December 31.Required:For the weighted-average method, round calculations to two decimal places. Round all final answers to the nearest dollar.1.  Calculate the total amount to be assigned to the ending inventory and cost of goods sold on December 31 under each of the following methods: Cost of Goods SoldCost of Ending Inventorya.  FIFO\$\$b.  LIFO\$\$c.  Weighted-average\$\$2.  Assume that the market price per unit (cost to replace) of Douglas's inventory on December 31 was \$13. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:a.  FIFO lower-of-cost-or-market\$b.  Weighted-average lower-of-cost-or-market\$3.  Prepare required entries to apply:a.  FIFO lower-of-cost-or-market b.  Weighted-average lower-of-cost-or-market If no entry is required, select "No entry required" and leave the amount boxes blank or enter "0".  DescriptionDebitCredita.             b.

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Cost Allocation and Lower-of-Cost-or-Market

Douglas Company's beginning inventory and purchases during the fiscal year ended December 31, 20--, were as follows:

 Units Unit Price Total Cost January 1, 20-- Beginning inventory 1,100 \$ 8.00 \$ 8,800 March 5 1st purchase 900 9.00 8,100 April 16 2nd purchase 400 9.50 3,800 June 3 3rd purchase 700 10.25 7,175 August 18 4th purchase 600 11.00 6,600 September 13 5th purchase 800 12.00 9,600 November 14 6th purchase 400 14.00 5,600 December 3 7th purchase 500 14.05 7,025 5,400 \$ 56,700

There are 1,000 units of inventory on hand on December 31.

Required:

For the weighted-average method, round calculations to two decimal places. Round all final answers to the nearest dollar.

1.  Calculate the total amount to be assigned to the ending inventory and cost of goods sold on December 31 under each of the following methods:

 Cost of Goods Sold Cost of Ending Inventory a.  FIFO \$ \$ b.  LIFO \$ \$ c.  Weighted-average \$ \$

2.  Assume that the market price per unit (cost to replace) of Douglas's inventory on December 31 was \$13. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:

 a.  FIFO lower-of-cost-or-market \$ b.  Weighted-average lower-of-cost-or-market \$

3.  Prepare required entries to apply:

 a.  FIFO lower-of-cost-or-market b.  Weighted-average lower-of-cost-or-market

If no entry is required, select "No entry required" and leave the amount boxes blank or enter "0".

Description Debit Credit
a.

b.

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Step 1

First-in-First-Out (FIFO): In First-in-First-Out method, the first purchased items are sold first. The value of the ending inventory consists of the recently purchased items.

Step 2

1.

Calculate the total amount of cost of goods sold and cost of ending inventory on September 30, 20-2 under FIFO method:

Step 3

2.

Calculate the total amount of cost of goods sold and cost of ending inv...

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