Freeman Company uses the periodic inventory system

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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