Valix Finacc vol 1 Problem 7-23

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 7-23

                                                                                Units               Unit cost           Total cost

FIFO

October 1 purchase                                                    300                  10,000           3,000,000

                                                                                                                

                                                                                    Units               Unit cost           Total cost

Weighted average

January  1                                                                    200                    7,500            1,500,000

April        5                                                                   300                    9,000            2,700,000

October 1                                                                      500                 10,000            5,000,000

Goods available for sale                                            1,000                                       9,200,000

Inventory – December 31 (9,200,000/1,000)                 300                   9,200             2,760,000

                                                                                    FIFO                      Weighted average           

Inventory – January 1                                           1,500,000                             1,500,000

Purchases                                                             7,700,000                             7,700,000         

Goods available for sale                                      9,200,000                             9,200,000         

Less: Inventory – December 31                             3,000,000                             2,760,000         

Cost of goods sold                                               6,200,000                             6,440,000