Q1) Stan's Wholesale purchases canned tomatoes from canneries and sells them to retail markets. In August 2009, Stan's inventory records illustrated the following:
| |
|
|
|
Cases |
Price |
| Aug |
1 |
Beginning inventory |
.................................. |
4,100 |
$ 10.50 |
| |
4 |
Purchase |
.................................. |
1,500 |
$ 11.00 |
| |
9 |
Sale |
.................................. |
950 |
$ 19.95 |
| |
13 |
Purchase |
.................................. |
1,000 |
$ 11.00 |
| |
19 |
Sale |
.................................. |
1,450 |
$ 19.95 |
| |
26 |
Purchase |
.................................. |
1,700 |
$ 11.50 |
| |
30 |
Sale |
.................................. |
1,900 |
$ 19.95 |
Even though it needs more computational effort, Stan's uses perpetual inventory method because management feels that advantage of always having present knowledge of inventory levels justifies the extra cost.
Questions:
Compute cost of goods sold and ending inventory using following cost flow alternatives. (Compute unit costs to the nearest cent.)
1) FIFO
2) LIFO
3) Average Cost