Question
Freeman Company uses the periodic inventory system. At the end of the annual accounting period, December 31, 2016, the accounting records in inventory showed:
Transactions
Units
Unit Cost
Beginning inventory, Jan. 1, 2016
300
$20
Purchase, Feb. 1
500
21
Purchase, May 15
400
22
Sale, March 15 (sold at $20 each)
(400)
Sale, July 31 (sold at $25 each)
(500)
Required:
Determine the amount of the ending inventory and cost of goods sold under each of the following methods assuming the periodic inventory system. To receive partial credit, show calculations.
Method
Ending
Inventory
Cost of Goods Sold
a.
Average cost
b.
FIFO
c.
LIFO
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