# P5.32

 Cost flow assumptions—FIFO, LIFO, and weighted average using a periodic system  The following data are available for Sellco for the fiscal year ended on January 31, 2014: Units Unit Price \$ Sales 3,200 Beginning Inventory 1,000 \$4.00 \$4,000 Purchases -in date order 1,200 \$5.00 \$6,000 1,600 \$6.00 \$9,600 800 \$8.00 \$6,400 Required: a.  Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system): 1.  FIFO. Units Unit Price \$ \$ Beginning Inventory 1,000 \$4.00 \$4,000 Purchases 1,200 \$5.00 \$6,000 1,600 \$6.00 \$9,600 800 \$8.00 \$6,400 \$22,000 Available 4,600 \$26,000 Ending Inventory (1,000 +3,600 less 3,200) = 1,400 \$0 CGS 2.  LIFO Units Unit Price \$ \$ Beginning Inventory 1,000 \$4.00 \$4,000 Purchases 1,200 \$5.00 \$6,000 1,600 \$6.00 \$9,600 800 \$8.00 \$6,400 \$22,000 Available 4,600 \$26,000 Ending Inventory (1,000 +3,600 less 3,200) = 1,400 \$0 CGS 3.  Weighted average. Round the unit cost answer to two decimal places and ending inventory to the nearest \$10. Beginning Inventory 1,000 \$4.00 \$4,000 Purchases 1,200 \$5.00 \$6,000 1,600 \$6.00 \$9,600 800 \$8.00 \$6,400 \$22,000 Available 4,600 \$26,000 Weighted Average Cost of Goods sold-3,200 units Ending Inventory b.  Assume that net income using the weighted-average cost flow assumption is \$116,000. Calculate net income under FIFO and LIFO. Weighted Average proof Income CGS Sales value FIFO Income Sales CGS Net Income LIFO Incme Sales CGS Net Income

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