year, it purchased three identical inventory items at different times

Accounting Nov 13, 2020

year, it purchased three identical inventory items at different times. The first unit cost $850, the second cost $950, and the third $800. Two of the three items were sold during the year.

Cost od good sold

Ending inventory

LIFO

FIFO

Weighted average

Expert Solution

Computation of the cost of goods sold and ending inventory using LIFO method:-

Cost of goods sold = $800 + $950

= $1,750

Ending inventory = $850

Computation of the cost of goods sold and ending inventory using FIFO method:-

Cost of goods sold = $850 + $950

= $1,800

Ending inventory = $800

Computation of the cost of goods sold and ending inventory using weighted average cost method:-

Average cost per unit = ($850 + $950 + $800) / 3

= $2,600 / 3

= $866.67

Cost of goods sold = $866.67 * 2

= $1,733.33

Ending inventory = $866.67

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote