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  • Periodic & Perpetual Method

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    romel08
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    1. The document provides examples of calculating cost of goods sold, ending inventory, and gross profit using different inventory costing methods (FIFO, LIFO, weighted average) for periodic and perpetual inventory systems. 2. Under periodic inventory, calculations are provided for a single period using opening and closing inventory. Under perpetual inventory, calculations are shown for two periods to illustrate ongoing inventory tracking. 3. The different inventory methods can result in varying costs of goods sold, inventory values, and gross profits depending on the cost flows assumed.

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    1. The document provides examples of calculating cost of goods sold, ending inventory, and gross profit using different inventory costing methods (FIFO, LIFO, weighted average) for periodic and perpetual inventory systems. 2. Under periodic inventory, calculations are provided for a single period using opening and closing inventory. Under perpetual inventory, calculations are shown for two periods to illustrate ongoing inventory tracking. 3. The different inventory methods can result in varying costs of goods sold, inventory values, and gross profits depending on the cost flows assumed.

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    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    30 views4 pages

    Periodic & Perpetual Method

    Uploaded by

    romel08
    1. The document provides examples of calculating cost of goods sold, ending inventory, and gross profit using different inventory costing methods (FIFO, LIFO, weighted average) for periodic and perpetual inventory systems. 2. Under periodic inventory, calculations are provided for a single period using opening and closing inventory. Under perpetual inventory, calculations are shown for two periods to illustrate ongoing inventory tracking. 3. The different inventory methods can result in varying costs of goods sold, inventory values, and gross profits depending on the cost flows assumed.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    of 4

    Class Practice:

    Periodic Inventory Method:


    Problem-1
    FIFO Method:
    Cost of goods sold: (400*20) + (1200*22) + (200*25) = 39400
    Value of ending inventory: (500*25) = 12500
    Gross Profit: (1800*30) 39400 = 14600

    LIFO Method:
    Cost of goods sold: (700*25) + (1100*22) = 41700
    Value of ending inventory: (100*22) + (400*20) = 10200
    Gross Profit: (1800*30) 41700 = 12300

    Weighted Average Method:


    Per Unit average cost: (400*20) + (1200*22) + (700*25) / 400 +1200+700 =
    22.565
    Cost of goods sold: (1800*22.565) = 40617
    Value of ending inventory: (1800*22.565) = 40617
    Gross Profit: (1800*30) 40617 = 13383

    Perpetual Inventory Method:


    Problem-2
    FIFO Method:
    Feb-14
    Cost of goods sold: (400*20) + (600*22) = 21200
    Value of ending inventory: (600*22) = 13200
    Gross Profit: (1000*28) 21200 = 6800

    Feb-28
    Cost of goods sold: (600*22) + (200*25) = 18200
    Value of ending inventory: (500*25) = 12500
    Gross Profit: (800*30) 18200 = 5800

    LIFO Method:
    Feb-14
    Cost of goods sold: (1000*22) = 22000
    Value of ending inventory: (200*22) + (400*20) =12400
    Gross Profit: (1000*28) 22000 = 6000
    Feb-28
    Cost of goods sold: (700*25) + (100*22) = 19700
    Value of ending inventory: (100*22) + (400*20) =10200
    Gross Profit: (800*30) 19700 = 4300
    Home Practice:
    Periodic Inventory Method:
    Problem-1
    FIFO Method:
    Cost of goods sold: (300*12) + (700*14) + (200*16) = 16600
    Value of ending inventory: (300*16) = 4800
    Gross Profit: (1200*20) 16600 = 7400

    LIFO Method:
    Cost of goods sold: (500*16) + (700*14) = 17800
    Value of ending inventory: (300*12) = 3600
    Gross Profit: (1200*20) 17800 = 6200

    Weighted Average Method:


    Per Unit average cost: (300*12) + (700*14) + (500*16) / 300 +700+500 = 14.267
    Cost of goods sold: (1200*14.267) = 17120.4
    Value of ending inventory: (300*14.267) = 4280.1
    Gross Profit: (1200*20) 17120.4 = 13383

    Perpetual Inventory Method:


    Problem-2
    FIFO Method:
    Dec-12
    Cost of goods sold: (300*12) + (500*14) = 10600
    Value of ending inventory: (200*14) = 2800
    Gross Profit: (800*15) 10600 = 1400
    Dec-31
    Cost of goods sold: (200*14) + (200*16) = 6000
    Value of ending inventory: (300*16) = 4800
    Gross Profit: (400*20) 6000 = 2000

    LIFO Method:
    Dec-12
    Cost of goods sold: (700*14) + (100*12) = 11000
    Value of ending inventory: (200*12) =2400
    Gross Profit: (800*15) 11000 = 1000
    Dec-31
    Cost of goods sold: (400*16) = 6400

    Value of ending inventory: (100*16) + (200*12) =4000


    Gross Profit: (400*20) 6400 = 1600

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