Periodic Inventory by Three Methods; Cost of Merchandise SoldThe units of an item available for sale during the year were as follows:Jan. 1Inventory40 units @ $122Mar. 10Purchase60 units @ $132Aug. 30Purchase30 units @ $136Dec. 12Purchase70 units @ $138There are 80 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. Round interim calculations to one decimal and final answers to the nearest whole dollar.  Cost of Merchandise Inventory and Cost of Merchandise SoldInventory MethodMerchandise InventoryMerchandise SoldFirst-in, first-out (FIFO)$$Last-in, first-out (LIFO)  Weighted average cost

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Asked Nov 15, 2019
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Periodic 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 40 units @ $122
Mar. 10 Purchase 60 units @ $132
Aug. 30 Purchase 30 units @ $136
Dec. 12 Purchase 70 units @ $138

There are 80 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. Round interim calculations to one decimal and final answers to the nearest whole dollar.

 
 
Cost of Merchandise Inventory and Cost of Merchandise Sold
Inventory Method Merchandise Inventory Merchandise Sold
First-in, first-out (FIFO) $ $
Last-in, first-out (LIFO)    
Weighted average cost    
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Expert Answer

Step 1

Calculate cost of merchandise available for sale:

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Cost of merchandise for sale 40 units @ $122 $4,880 60 units @ $132 $7,920 30 units@ $136 70 units@ $138 200 units@ average cost of $132.7 $4,080 $9,660 $26,540

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Step 2

a.

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a. First-in, First-out: Merchandise inventory: 70 units @ $138 $9,660 10 units @ $136 $1,360 $11,020 Merchandise sold: $26,540-$11,020 $15,520

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Step 3

b.

...
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b. Last-in, First-out: Merchandise inventory: 40 units @ $122 $4,880 40 units @$132 $5,280 $10,160 Merchandise sold: $26,540-$10,160 $16,380

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