Page 1 > of 9 0 ZOOM + Exercise 6.5 (this is also in your book). Mather sells a snowboard popular with snowboard enthusiasts. Mather's beginning inventory and purchases of snowboards during SEPT are below. During the same month, 102 snowboards were sold. Mather uses a periodic inventory system. Date Explanaton Sept 01 Beginning INV Sept 12 Purchase Sept 19 Purchase Sept 26 Purchase Totals 24622 Units 12 Unit Cost Total Cost $ 100 1,200 45 103 4,635 50 104 5,200 20 105 2,100 127 13,135 Instructions Using the above figures, calculate the ending inventory at SEPT 30 and the Cost of Goods Sold using the FIFO, LIFO, and Average cost methods. (Note: round weighted- average unit cost to three decimal places.) Then PROVE IT using tables below! FIFO Date Ending Inventory Calculation Units Unit Cost Total Cost 25 Cost of Goods Sold Cost of Goods Avail for Sale Less: Ending Inventory 13,135 Cost of Goods Sold Instructor Notes: 127 units could have been sold. But 102 units were sold. So, END INV is 25 units (127-102). Calculate the END INV $$ before you calculate CGS (cost of goods sold). Using "First In" means END INV (the 25 units) is made up of the newest units (latest purchase date) as in... 20 units of last purchase (latest date) PLUS 5 units from prior purchase. TO PROVE IT: In FIFO the 102 units sold must consist of the 12 oldest units (they are "first in" the INV) so 102-12 beg inv = 90 units). 90-45 units (prior purchase) = 45 units left to account for. 45-45 from next prior purchase (which will leave 5 for the ending inventory). CGS PROOF (FIFO) Date Units Beg 9/01 12 LIFO Date 102 Units Cost 100 Total Cost 1,200 Ending Inventory Calculation Units 25 10,515 Make sure your amt above is the same Unit Cost Total Cost Cost of Goods Sold Cost of Gds Avail for Sale Less: Ending Inventory Cost of Goods Sold CGS PROOF (LIFO) Date Units Units Cost Total Cost 102 FYI: Averages... a "math refresher": 10,596 Purch #1 1 unit $1 ea $1 Purch #2 2 units $2 ea $4 Purch #3 3 units $3 ea $9 3 purchases 6 units $14 Weighted Average Unit Cost Calculation Total Cost Total Units = 13,135 To calculate a simple average you take $14/3 purchases = 4.67 per purchase. To calculate a weighted average take $14/6 units= 2.33 per unit Wtd-Avg Unit Cost (to 3 decimal places)