Answer 2.1 :

Cost of Closing Inventory on 30 June = $423

Cost of Goods Sold for the year = $885

Explanation :

Particulars	Number of Units	Unit Cost	Cost of Goods Available for Sale (Number of Units * Unit Cost)
1 July Opening Inventory	8	$35	$280
14 August Purchases	11	$38	$418
8 January Purchases	10	$40	$400
3 March Purchases	5	$42	$210
Total	34	$38.47	$1308

Total Cost of Goods Available for Sales = Opening Inventory on 1 July + Purchases on 14 August + Purchases on 8 January + Purchases on 3 March

= $280 + $418 + $400 + 210

= $1308

Total Number of Units Available for Sale = Opening Inventory units + Units purchased on 14 August + Units purchased on 8 January + Units purchased on 3 March

= 8 + 11 + 10 + 5

= 34

Weighed Average Cost per unit = Total Cost of Goods Available for Sales / Total Number of Units Available for Sale

= $1,308 / 34

= $38.4705882352

= $38.47 (rounded off to two decimal places)

Total Number of Units Sold = Units sold on 25 September + Units Sold on 13 April + Units Sold on 10 June

= 9 + 11 + 3

= 23

Cost of Goods Sold = Total Number of Units Sold * Weighted Average Cost per unit

= 23 * $38.47

= $884.81

= $885 (rounded off)

Closing Inventory Units = Total Number of Units Available for Sale - Total Number of Units Sold

= 34 - 23

= 11

Cost of Closing Inventory = Closing Inventory Units * Weighted Average Cost per unit

= 11 * $38.47

= $423.17

= $423 (rounded off)

Answer 2.2 :

Cost of Closing Inventory on June 30 = $450

Cost of Goods Sold for the year = $858

Explanation :

Date	Particulars		Cost of Goods Available for Sale				Cost of Goods Sold				Ending Inventory
		Number of Units	Unit Cost	Total Cost		Number of Units	Unit Cost	Total Cost		Number of Units	Unit Cost	Total Cost
1 July	Opening Inventory	8	$35	$280						8	$35	$280
14 August	Purchases	11	$38	$418						8	$35	$280
										11	$38	$418
25 September	Sales					8	$35	$280		10	$38	$380
						1	$38	$38
8 January	Purchases	10	$40	$400						10	$38	$380
										10	$40	$400
3 March	Purchases	5	$42	$210						10	$38	$380
										10	$40	$400
										5	$42	$210
13 April	Sales					10	$38	$380		9	$40	$360
						1	$40	$40		5	$42	$210
10 June	Sales					3	$40	$120		6	$40	$240
										5	$42	$210
30 June	Total	34		$1308		23		$858		11		$450

In First In First Out (FIFO) method, goods purchased first are sold first.

Opening Inventory = 8 Units @ $35/unit (Given)

Purchases on August 14 = 11 units @ $38/unit (Given)

Goods sold on 25 September = 9 (Given)

Therefore,

Out of the 9 units sold, 8 units will sold from the beginning inventory @$35/unit and the remaining 1 unit will be sold from the purchases on 14 August @$38/unit.

Cost of Goods Sold on 25 September = (8 * $35) + (1 * $38)

= $280 + $38

= $318

Therefore,

Balance of inventory on 25 September = 10 units @$38/unit from the purchases on August 14.

Purchases on January 8 = 10 units @ $40/unit (Given)

Purchases on March 3 = 5 units @ $42/unit (Given)

Goods sold on 13 April = 11 (Given)

??????Therefore,

Out of the 11 units sold, 10 units will be sold @$38/unit from the balance on September 25 and the remaining 1 unit will be sold @$40/unit from the purchases on January 8.

Cost of Goods Sold on 13 April = (10 * $38) + (1 * $40)

= $380 + $40

= $420

Balance of inventory on April 13 = 9 units @$40/unit from the purchases on January 8 and 5 units @$42/unit from the purchases on March 3.

Goods Sold on 10 June = 3 (Given)

3 units will be sold @$40/unit from the purchases on January 8.

Cost of Goods Sold on 10 June = 3 * $40

= $120

Balance on june 10 = 6 units @$40/unit from the purchases on January 8 and 5 units @$42/unit from the purchases on March 3.

Therefore,

Ending Inventory on June 30 = (6 * $40) + (5 * $42)

= $240 + $210

= $450

Total Cost of Goods Sold on June 30 = Cost of Goods Sold on 25 September + Cost of Goods Sold on 13 April + Cost of Goods Sold on 10 June

= $318 + $420 + $120

= $858