Below is the record of inventory purchases and sales of themonth of August 2019...

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Accounting

Below is the record of inventory purchases and sales of themonth of August 2019 for Company A. Company A uses the perpetualinventory system.
Date
Units
Unit Cost/Selling Price per Unit
Aug 01
Beginning Inventory
140
43
Aug 05
Purchase
115
45
Aug 09
Sales
120
85
Aug 12
Sales
60
90
Aug 16
Purchase
150
52
Aug 25
Sales
85
80
Aug 30
Sales
80
95
Required:
Company A's Income Statement for August 2019 indicates that costof goods sold for the month is $16,415. Does Company A use LIFO,FIFO, Weighted-Average Cost, or Specific Identification?
Calculate the ending inventory for August 2019 for CompanyA.
If Company A uses the Weighted Average Inventory Costassumption, what is the total cost of goods sold for the month ofAugust 2019? (Round your average cost calculations to four decimalplaces and all other amounts to two decimal places)

Answer & Explanation Solved by verified expert

3.9 Ratings (486 Votes)

Company A uses LIFO method as per the below calculation:

Date	Particulars	Units	Unit Cost/SP	LIFO (units)	LIFO COGS
Aug-01	Beginning Inventory	140	43	80	3,440
Aug-05	Purchase	115	45	115	5,175
Aug-09	Sales	120	85
Aug-12	Sales	60	90
Aug-16	Purchase	150	52	150	7,800
Aug-25	Sales	85	80
Aug-30	Sales	80	95
				345	16,415

Total Inventory = Beginning Inventory + Purchases = 140 + 115 + 150 = 405 units

Ending Inventory = Total Inventory - Sales = 405 - 120 - 60 - 85 - 80 = 60 units

Value of Ending Inventory as per LIFO = 60 x 52 = 3,120

Weighted Average Cost = [(140x43)+(115x45)+(150x52)] / (140+115+150) = 18,995 / 405 = 46.9012

Cost of Goods Sold = Units Sold x Weighted Average Cost = 345 x 46.9012 = 16,180.91

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Transcribed Image Text

In: AccountingBelow is the record of inventory purchases and sales of themonth of August 2019 for...Below is the record of inventory purchases and sales of themonth of August 2019 for Company A. Company A uses the perpetualinventory system.DateUnitsUnit Cost/Selling Price per UnitAug 01Beginning Inventory14043Aug 05Purchase11545Aug 09Sales12085Aug 12Sales6090Aug 16Purchase15052Aug 25Sales8580Aug 30Sales8095Required:Company A's Income Statement for August 2019 indicates that costof goods sold for the month is $16,415. Does Company A use LIFO,FIFO, Weighted-Average Cost, or Specific Identification?Calculate the ending inventory for August 2019 for CompanyA.If Company A uses the Weighted Average Inventory Costassumption, what is the total cost of goods sold for the month ofAugust 2019? (Round your average cost calculations to four decimalplaces and all other amounts to two decimal places)

Date		Units	Unit Cost/Selling Price per Unit
Aug 01	Beginning Inventory	140	43
Aug 05	Purchase	115	45
Aug 09	Sales	120	85
Aug 12	Sales	60	90
Aug 16	Purchase	150	52
Aug 25	Sales	85	80
Aug 30	Sales	80	95