Lester Company sells many products. Hackenberry is one of its popular items. Below is an analysis of the inventory purchases and sales of Hackenberry for the month of March. Lester Company uses the periodic inventory system. Instructions
(a) Using the FIFO assumption calculate the amount charged to cost of goods sold for March. (Show computations)
(b) Using the weighted average method calculate the amount assigned to the inventory on hand on March 31. (Show computations)
(c) Using the LIFO assumption calculate the amount assigned to the inventory on hand on March 31. (Show computations)

Question

Lester Company sells many products. Hackenberry is one of its popular items. Below is an analysis of the inventory purchases and sales of Hackenberry for the month of March. Lester Company uses the periodic inventory system.

Instructions
(a) Using the FIFO assumption calculate the amount charged to cost of goods sold for March. (Show computations)
(b) Using the weighted average method calculate the amount assigned to the inventory on hand on March 31. (Show computations)
(c) Using the LIFO assumption calculate the amount assigned to the inventory on hand on March 31. (Show computations)

brandy martin · Accepted Answer

Final Answer :   (a) Using FIFO - the earliest units purchased were the first sold.  	ext { (a) Using FIFO - the earliest units purchased were the first sold. }  (a) Using FIFO - the earliest units purchased were the first sold.  3 / 1 100 @ $ 40 = $ 4 , 000 3 / 3 60 @ 50 = 3 , 000 3 / 10 90 ‾ @ 55 = 4 , 950 ‾ \begin{array}{lrrrrr} 3 / 1  &  100  @  \$ 40 = \$ 4,000 \3 / 3   &  60 @   50  =  3,000 \ 3 / 10   &  \underline{90} @ 55 =  \underline{4,950} \\end{array} 3/1 3/3 3/10 ​ 100@$40 = $4 , 000 60@50 = 3 , 000 90 ​ @55 = 4 , 950 ​ ​ 250 units  $ 11 , 950 ‾ =  the cost of qoods sold  \quad\quad\quad\quad 	ext{250 units }  \quad \underline{\$ 11,950 } =	ext { the cost of qoods sold } 250 units  $11 , 950 ​ =  the cost of qoods sold    (b) Calculate the weighted average unit cost:$20400 ÷ 400 = $51$51 × units in ending inventory (400 available less 250 sold = 150)$51 × 150 = $7650 (c) There are 150 units in ending inventory. They are comprised of the first units purchased when LIFO is assumed. 3 / 1 100 @ $ 40 = $ 4 , 000 3 / 3 50 ‾ @ $ 50 = 2 , 500 ‾ 150 units $ 6 , 500 =  ending inventory  \begin{array} { l } 3 / 1 \quad 100 @\$ 40 = \$ 4,000 \3 / 3 \quad \underline { 50 } @ \$ 50 = \underline {  2,500 } \ \quad \quad150 	ext{units} \quad\quad\$6,500=	ext { ending inventory }\end{array} 3/1 100@$40 = $4 , 000 3/3 50 ​ @$50 = 2 , 500 ​ 150 units $6 , 500 =  ending inventory  ​

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