Ferris Company began 2013 with 4,000 units of its principal product

| November 24, 2016

Question
Ferris Company began 2013 with 4,000 units of its principal product. The cost of each unit is $7. Merchandise transactions for the
month of January 2013 are as follows:
PURCHAES:
Date of purchase:
Units:
Unit Cost*
Jan 10
3,000
8.00
Jan 18
4,000
9.00
TOTALS
7,000
*INCLUDES PURCHASE PRICE AND COST OF FREIGHT

Total Cost
24,000
36,000
60,000

SALES:
Date of sale
Jan 5
Jan 12
Jan 20

units
2,000
1,000
3,000
6,000
5,000 units were on hand at the end of the month.
Required:

Calculate January’s ending inventory and cost of goods sold for the month using each of the following alternatives: (Enter sales with a negative
FIFO
Cost of Goods Available Cost of Goods sold
Ending inventory periodic FIFO
for sale
periodic FIFO
# of units
Cost per unit
Cost of goods available # of units sold
Cost per unit
for sale
Beg. Inventory

4000

7.00

28000

4,000

7.00

Jan 10
Jan 18

3000
4000

8.00
9.00

24000
36000

2000

8.00
9.00

TOTAL

11000

88000

6000

Purchases:

FIFO Periodic = first in first out: ending inventory consists of later purchases. Cost of goods sold consists of earliest purchases.
LIFO

Cost of Goods Available for sale
# of units
Cost per
Cost of
unit
goods
available
for sale

Beg.
Inventory
Purchases:
Jan 10
Jan 18
TOTAL

LIFO method applies the rule of last in first out

Cost of Goods sold periodic LIFO
# of units
Cost per
Cost of
sold
unit
goods
sold

Ending inventory periodic LIFO
# of units
Cost per
Ending
in ending
unit
inventory
inventory

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