Financial Accounting

Home Work 2

Zubaidah Abdul Rehman

20042080

HW Question
On Jan 5 purchased 400 units @ $5
On Jan 8 Purchased 600 units @ $6
On Jan 9 Purchased 800 units @ $10
On Jan 12 Sold 900 units
Compute Cost of goods sold, Inventory in units, and Inventory in value
HW Answer
Date
Jan. 5
Jan. 8
Jan. 9
Total

Cost of Goods Available for Sale

Explanation
Units
Units Cost
Beginning inventory
400
$5
Purchase
600
$6
Purchase
800
$10
1800
In

Date

Total Cost
$2000
$3600
$8000
$13600

First-In-First-Out (FIFO)
Out

Balance

Jan. 5
Jan. 8

400
600

$5
$6

$2000
$3600

400
500

$5
$6

$2000
$3000

400
1000

$2000
$5600

Jan. 9

800

$10

$8000

1800

$13600

900
Balance in
Units

$8600
Balance
in Value

Computing

Date

$5000
Cost of
Goods
Sold
Last-In-First-Out (LIFO)
In
Out

Balance

Jan. 5
Jan. 8

400
600

$5
$6

$2000
$3600

800
100

$10
$6

$8000
$600

400
1000

$2000
$5600

Jan. 9

800

$10

$8000

1800

$13600

900
Balance in
Units

$5000
Balance
in Value

Computing

$8600
Cost of
Goods
Sold

P value is13600/1800=7.5
In
Date

Average-Cost
Out

Balance

Jan. 5
Jan. 8

400
600

$5
$6

$2000
$3600

900

$7.5

6750

400
1000

$2000
$5600

Jan. 9

800

$10

$8000

1800

$13600

900
Balance in
Units

$6850
Balance
in Value

Computing

Method
FIFO
LIFO
Average-Cost

$6750
Cost of
Goods
Sold
Summary
Costs of Goods Sold
Balance in Units
$5000
900
$8600
900
$6750
900

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Balance in Value
$8600
$5000
$6850