Description
Calculate ending inventory and cost of goods sold using the last in, first out (LIFO); moving; and weighted average methods.
Tony Merchandise Company has the following information for the month of February:
Feb. 2 | Beginning inventory | 20 | units | @ | $12 | per unit |
Feb. 5 | Purchase | 20 | units | @ | $16 | per unit |
Feb. 8 | Sale | 12 | units | |||
Feb. 21 | Purchase | 12 | units | @ | $18 | per unit |
Feb. 25 | Sale | 14 | units |
Answer the following questions for Tony Merchandise Company:
- Calculate the dollar ending inventory if first in, first out (FIFO) is used.
- Calculate the cost of goods sold if LIFO is used.
- Calculate the dollar ending inventory if weighted average is used.
- According to the generally accepted accounting principles (GAAP), discuss the objectives of inventory costing.
- Discuss the consequences of selecting one method instead of others.
Explanation & Answer
Hi there,Attached is the complete solution in an Excel file.Thanks again!Selenica
Feb. 2
Feb. 5
Feb. 8
Feb. 21
Feb. 25
Beginning inventory20
Purchase
20
Sale
12
Purchase
12
Sale
14
units
units
units
units
units
@
@
$12
$16
per unit
per unit
@
$18
per unit
FIFO
1 Calculating the ending inventory
Tran...
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