Inventory Valuation using Average cost, FIFO, LIFO methods.
Janet has discovered that selling merchandise is even more profitable than the services her spa was providing. This is especially true since most of her clients are celebrities or other wealthy individuals, who don't mind paying top dollar for quality merchandise. Randy's Spa Supplies sells plush robes and slippers that Janet's customers can purchase and take home after their spa treatment. The most popular item is a silk-lined, 100% plush cotton robe. This merchandise has been selling extremely well at Janets Spa. Janet has decided to carry a significant amount of this inventory item. Since Randy's Spa Supplies is still a young company, the amount it charges for the robes varies from order to order. Information is given below for inventory and sales of these units of product in Randy's records.
|
February 1 Beginning inventory balance
|
120 units @ $65 per unit
|
$7,800
|
|
2/3 purchases
|
450 units @ $70 per unit
|
$31,500
|
|
2/12 purchases
|
360 units @ $72 per unit
|
$25,920
|
|
2/20 purchases
|
280 units @ $66 per unit
|
$18,480
|
|
2/26 purchases
|
216 units @ $64 per unit
|
$13,824
|
Goods available for sale 1,426 units $97,524
Sales1,280 units
1. Assuming the periodic inventory system is in use, what was the Cost of Goods Sold if the Average Cost Method is used? - There is a slight rounding difference
2. Assuming the periodic inventory system is in use, what is the value of ending inventory if the Average Cost Method is used? There is a slight rounding difference
3. Assuming the periodic inventory system is in use, what was the Cost of Goods Sold if the LIFO Method is used?
4. Assuming the periodic inventory system is in use, what is the value of ending inventory if the LIFO Method is used?
5. Assuming the periodic inventory system is in use, what was the Cost of Goods Sold if the FIFO Method is used?
6. Assuming the periodic inventory system is in use, what is the value of ending inventory if the FIFO Method is used?