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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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( Appendix 6B) Inventory Costing Methods: Periodic Average Cost

Refer to the information for Filimonov Inc. (p. 337) and assume that the company uses a periodic inventory system.

Required:

Calculate the cost of goods sold and the cost of ending inventory using the average cost method. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.)

To determine

Concept introduction:

Periodic Inventory System:

The periodic inventory system records and updates the inventory at the end of a particular period. The inventory balance is not updated after each transaction and it is updated periodically.

Average method:

Under this method, the cost per unit of the inventory is calculated as weighted average cost per unit and the cost of goods sold and inventory is calculated with the help of weighted average cost per unit.

To calculate:

The Cost of goods sold and ending inventory under Average cost Periodic inventory system.

Explanation

The Cost of goods sold and ending inventory under Average cost Periodic inventory system is calculated as follows:

Filimonov Inc.
Periodic Inventory Record-Average Cost
Unit Rate Total Cost
Beginning Inventory 200 $ 10.0000 $ 2,000
Purchase -June-9 300 $ 12...

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