Question $4$: Inventory Costing

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Part A $(8$ Marks$)$

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Chico Company uses the periodic inventory method and had the following inventory information available:

$$ Units$$Unit Cost$$Total Cost

Jan. $1$Beginning inventory$200$$$4$$ $800$

Jan. $20$Purchase$40052,000$

July $25$Purchase$30072,100$

Oct. $20$Purchase$40083,200$

$1,300$$$8,100$

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A physical count of inventory on December $31$ revealed that there were $600$ units on hand.

Required:

i$)$ Calculate Cost of Good Sold and Ending Inventory using Weighted Average. $($show all calculations$)$

ii$)$ Calculate Cost of Good Sold and Ending Inventory using FIFO.

$($show all calculations$)$

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Part B $(9$ Marks$)$

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Woodland Printers uses the perpetual inventory system. On September $30,2028,$ the company$$s year end, a physical count was taken of the inventory on hand. The cost of the inventory on hand was determined to be $$325,400.$ However, the accountant has questions about the following items:

$1.$On the store shelves, the staff counted seven paintings held by Woodland on consignment from a local artist. The paintings are included on the inventory count at a cost of $$4,200.$

$2.$On September $30,$ a shipment of goods was sent to a customer, FOB destination. The cost of the goods shipped is $$7,800,$ and freight, which is to be paid by Woodland, will cost $$200.$ These items are not included in the inventory count. Delivery is expected to take three days.

$3.$On October $2,$ a freight company delivered goods that cost $$10,000$ to Woodland$$s warehouse. The goods had been shipped by the vendor on September $29,$ FOB shipping point. Freight on this shipment will amount to $$500$ and will be paid by the appropriate party. The goods are not included on the inventory count.

$4.$On September $30,$ a loyal customer visited Woodland$$s retail shop and asked that certain items be set aside for him. The goods set aside have a cost of $$1,300.$ The customer intends to let Woodland know no later than October $2$ whether or not he wishes to finalize the sale and have the goods shipped to his home. The freight will cost $$50$ and will be paid by Woodland. The salesperson was fairly sure the customer will take the items, and so Woodland prepared the sales invoice on September $30.$ The items are not included on the inventory count.

$5.$Residing in Woodland$$s warehouse is merchandise costing $$5,000$ that was purchased in September and found to be defective. Woodland$$s purchasing manager has arranged with the vendor to accept return of the goods and has packaged them for return shipment. The vendor processed a credit to Woodland$$s account on September $28,$ and has arranged to have the goods picked up on October $1.$ The items are included on the inventory count.

Required:

Calculate the correct inventory balance at September $30,2028.$ For each of the above items, explain the basis of your treatment of the item.

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Part A $(8$ Marks$).$

Chico Company uses the periodic inventory method and had the following inventory information available:

A physical count of inventory on December $31$ revealed that there were $600$ units on hand.

Required:

i$)$ Calculate Cost of Good Sold and Ending Inventory using Weighted Average. $($show all calculations$)$

ii$)$ Calculate Cost of Good Sold and Ending Inventory using FIFO.

$($show all calculations$)$

Part B $(9.$Marks$).$

Woodland Printers uses the perpetual inventory system. On September $30,2028,$ the company's year end, a physical count was taken of the inventory on hand. The cost of the inventory on hand was determined to be $\backslash (\backslash$$ $325,400\backslash ).$ However, the accountant has questions about the following items:

$1.$ On the store shelves, the staff counted seven paintings held by Woodland on consignment from a local artist. The paintings are included on the inventory count at a cost of $\backslash (\backslash$$ $4,200\backslash ).$

$2.$ On September $30,$ a shipment of goods was sent to a customer, FOB destination. The cost of the goods shipped is $\backslash (\backslash$$ $7,800\backslash ),$ and freight, which is to be paid by Woodland, will cost $\backslash (\backslash$$ $200\backslash ).$ These items are not included in the inventory count. Delivery is expected to take three days.

$3.$ On October $2,$ a freight company delivered goods that cost $\backslash$$$10,000$ to Woodland's warehouse. The goods had been shipped by the vendor on September $29,$ FOB shipping point. Freight on this shipment will amount to $\backslash (\backslash$$ $500\backslash )$ and will be paid by the appropriate party. The goods are not included on the inventory count.

$4.$ On September $30,$ a loyal customer visited Woodland's retail shop and asked that certain items be set aside for him. The goods set aside have a cost of $\backslash (\backslash$$ $1,300\backslash ).$ The customer intends to let Woodland know no later than October $2$ whether or not he wishes to finalize the sale and have the goods shipped to his home. The freight will cost $\backslash (\backslash$$ $50\backslash )$ and will be paid by Woodland. The salesperson was fairly sure the customer will take the items, and so Woodland prepared the sales Part B $(9.$ Marks$).$

Woodland Printers uses the perpetual inventory system. On September $30,2028,$ the company's year end