Principles of Financial Accounting · free preview

Cost of Goods Sold and Ending Inventory under the Periodic Method

Under a periodic system, cost of goods sold is computed once from the same layer data used by every method, beginning inventory plus purchases forms goods available for sale, and the counted ending inventory claims its share under FIFO, LIFO, or weighted average.

1. Setting up one shared example

Setting up one shared example

2. FIFO periodic

FIFO periodic

3. LIFO periodic

LIFO periodic

4. Weighted average periodic

Weighted average periodic

5. Shared starting point

What do FIFO, LIFO, and weighted average agree on under the periodic method?

6. FIFO periodic computation

Goods available are 10 units at 50 dollars, 20 at 55 dollars, and 15 at 60 dollars, with 15 units in ending inventory. What is ending inventory under FIFO?

7. LIFO periodic computation

Using the same data, what is cost of goods sold under LIFO?

8. Weighted average unit cost

Goods available are 45 units costing 2,500 dollars in total. Compute the weighted average cost per unit, rounded to the nearest cent.

9. FIFO cost of goods sold

Using the example data, compute FIFO cost of goods sold in dollars, number only.

10. Weighted average ending inventory

Weighted average cost is about 55.56 dollars per unit and 15 units remain. Compute ending inventory in dollars rounded to the nearest whole dollar.

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