The Petrowski Company uses the perpetual inventory system. The Petrowski Company has the following data available for the month of January:

Date
Transaction
Units
Unit Cost
Jan. 1
Beginning inventory
100
$100
Jan. 9
Purchase
300
$120
Jan. 10
Sale
200

Jan. 15
Purchase
400
$140
Jan. 18
Sale
300

Jan. 24
Purchase
100
$160
Jan. 30
Sale
10

1. Determine the Cost of Goods Sold for January using the following methods:
a. FIFO
b. LIFO
c. Moving-average (Round per unit costs and all other dollar amounts to two decimal places.)

What will be an ideal response?

Answer:
a. FIFO
FIFO periodic is the same as FIFO perpetual. The company sold 510 units. Cost of Goods Sold has the earliest costs.
Cost of Goods Sold:
(100 × $100)
$10,000
(300 × $120)
$36,000
(110 × $140)
$15,400
Total Cost of Goods Sold
$61,400

b. LIFO

Cost of Goods Sold
Ending Inventory
1/9

(100 × $100) + (300 × $120) = $46,000
1/10
200 × $120 = $24,000
(100 × $100) + (100 × $120) = $22,000
1/15

(100 × $100) + (100 × $120) = $22,000
Add: 400 × $140 = $56,000
1/18
300 × $140 = $42,000
(100 × $100) + (100 × $120) + (100 × $140) = $36,000
1/24

(100 × $100) + (100 × $120) + (100 × $140) = $36,000
Add: 100 × $160 = $16,000
1/30
10 × $160 = $1,600
(100 × $100) + (100 × $120) + (100 × $140) + (90 × $160) = $50,400
Total Cost of Goods Sold: $24,000 + $42,000 + $1,600 = $67,600

c. Moving average

Cost of Goods Sold
Ending Inventory
1/9

= $115
1/10
200 × $115 = $23,000
200 × $115 = $23,000
1/15

200 × $115 = $23,000
Add: 400 × $140 = $56,000
Total: $79,000 / 600 = $131.67
1/18
300 × $131.67 = $39,501
300 × $131.67 = $39,501
1/24

300 × $131.67 = $39,501
Add: 100 × $160 = $16,000
Total: $39,501 + $16,000 = $55,501 / 400 = $138.75
1/30
10 × $138.75 = $1,387.50
390 × $138.75 = $54,112.50
Total Cost of Goods Sold: $23,000 + $39,501 + $1,387.50 = $63,888.50