Answer:
Answer for the question;
Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a periodic inventory system. The following are the transactions for the month of July. Units Unit Cost July 1 Beginning Inventory 2,000 $ 25 July 5 Sold 1,000 July 13 Purchased 6,000 27 July 17 Sold 3,000 July 25 Purchased 8,000 29 July 27 Sold 5,000 Calculate the cost of goods available for sale, ending inventory, and cost of goods sold if Aircard uses (a) FIFO, (b) LIFO, or (c) weighted average cost. (Round "Cost per Unit" to 2 decimal places.)
is given in the attachment.
Explanation:
Aircard Corporation's Cost of goods available for sale, cost of goods sold, and ending inventory under each method are as follows:
FIFO LIFO Weighted-
Average
Cost of goods sold $241,000 $259,000 $249,750
Ending inventory $203,000 $185,000 $194,250
Cost of goods available for sale $444,000 $444,000 $444,000
Data and Calculations:
Units Unit Cost Total Cost
Purchased Sold
July 1 Beginning Inventory 2,000 $ 25 $50,000
July 5 Sold -1,000
July 13 Purchased 6,000 27 162,000
July 17 Sold -3,000
July 25 Purchased 8,000 29 232,000
July 27 Sold -5,000
Total Goods available /Sold 16,000 (9,000) $444,000
Average cost of goods = $27.75 ($444,000/16,000)
Ending inventory = 7,000 (16,000 - 9,000) units
a) FIFO:
Ending inventory = $203,000 ($29 x 7,000)
Cost of goods sold = $241,000 ($444,000 - $203,000)
b) LIFO:
Ending inventory = $185,000 ($27 x 5,000 + $25 x 2,000)
Cost of goods sold = $259,000 ($444,000 - $185,000)
c) Weighted-average cost:
Ending inventory = $194,250 ($27.75 x 7,000)
Cost of goods sold = $249,750 ($27.75 - 9,000)
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