Determine cost of sales and ending inventory using FIFO, LIFO, and average cost. Modelmania Ltd sells model
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Question:
Determine cost of sales and ending inventory using FIFO, LIFO, and average cost.
Modelmania Ltd sells model cars. At the beginning of March, Modelmania Ltd had in beginning inventory 90 model cars with a unit cost of $35. During March Modelmania Ltd made the following purchases of model cars.
March 5 | 210 @ $40 | March 21 | 240 @ $50 |
March 13 | 330 @ $45 | March 26 | 90 @ $55 |
During March, 810 units were sold. Modelmania Ltd uses a periodic inventory system.
Required
- Determine the cost of goods available for sale.
- Determine (1) the ending inventory and (2) the cost of sales under each of the assumed cost flow methods (FIFO, LIFO and average cost). Prove the accuracy of the cost of sales under the FIFO and LIFO methods.
- Which cost flow method results in (1) the highest inventory amount for the statement of financial position and (2) the highest cost of sales for the statement of profit or loss?
Expert Answer:
Detemination of costofgoods auallable for sale Date units Perinit cost TOtal 1st march 90 35 ... View the full answer
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