Question - Henry's House of Fashions uses a perpetual inventory system. It recorded the following purchases and sales transactions in June:
Cost of goods available for sale
|
Date
|
|
Units
|
Unit Cost
|
|
June 1
|
Beg. Inventory
|
10
|
$91
|
|
3
|
Purchases
|
15
|
$106
|
|
17
|
Purchases
|
20
|
$115
|
|
28
|
Purchases
|
10
|
$119
|
Retail sales of goods
|
Date
|
|
Units
|
Unit price
|
|
June 17
|
Sales
|
20
|
$130
|
|
30
|
Sales
|
23
|
$150
|
Required:
1. Compute both the cost of goods available for sale and the number of units available for sale.
2. Compute the number of units remaining in the ending inventory.
3. Compute the cost assigned to the ending inventory and cost of goods sold using:
a. FIFO and
b. Weighted average
Show your calculations clearly by using a table for each date, as indicated above.
4. If costs are declining, will the weighted average or FIFO method of inventory valuation yield the lower cost of goods sold? Why?