Jordy & Company uses a perpetual inventory system. The following information is availate fos Noveraber:

Units

Nos.

Balance

10

Purchase

20

Purchast

20

Sale

Purchase Price

$5.00

$5.50

$6.00

Sales Price

10

(10)

12

sale

$8.00

(30)

38.00

Cakulate the cost of goods sold and ending inventory under

(a) FIFO and (b) weighted average. (Round the

hiehled aberase cos par unit to puro decimal places.)

To calculate the Cost of Goods Sold (COGS) and Ending Inventory using FIFO (First-In, First-Out) and Weighted Average methods, we need to analyze the given data and apply the respective inventory valuation methods.

### Given Information:
1. Beginning Inventory: 10 units @ $5.00
2. Purchases:
   - 20 units @ $5.50
   - 20 units @ $6.00
3. Sales:
   - 10 units @ $8.00
   - 30 units @ $8.00

### FIFO (First-In, First-Out) Method:

#### Step 1: Determine the Cost of Goods Sold (COGS)
- **First Sale (10 units)**: From the beginning inventory (10 units @ $5.00 each)
  - COGS for first sale = 10 units * $5.00 = $50.00

- **Second Sale (30 units)**:
  - Remaining from beginning inventory: 0 units
  - Next, 20 units from the first purchase (20 units @ $5.50 each)
    - COGS for first part = 20 units * $5.50 = $110.00
  - Remaining 10 units from the second purchase (10 units @ $6.00 each)
    - COGS for second part = 10 units * $6.00 = $60.00

  - Total COGS for second sale = $110.00 + $60.00 = $170.00

- **Total COGS**:
  - $50.00 (first sale) + $170.00 (second sale) = $220.00

#### Step 2: Determine the Ending Inventory
- Remaining inventory after sales:
  - First purchase: 0 units remaining
  - Second purchase: 10 units remaining (purchased at $6.00 each)
  - Ending Inventory Value = 10 units * $6.00 = $60.00

### Weighted Average Method:

#### Step 1: Calculate Weighted Average Cost per Unit
- Total units available for sale: 10 (beginning) + 20 (first purchase) + 20 (second purchase) = 50 units
- Total cost of inventory: (10 * $5.00) + (20 * $5.50) + (20 * $6.00) = $50 + $110 + $120 = $280
- Weighted Average Cost per Unit = Total Cost / Total Units = $280 / 50 = $5.60

#### Step 2: Determine the Cost of Goods Sold (COGS)
- **First Sale (10 units)**: 10 units * $5.60 = $56.00
- **Second Sale (30 units)**: 30 units * $5.60 = $168.00

- **Total COGS**:
  - $56.00 (first sale) + $168.00 (second sale) = $224.00

#### Step 3: Determine the Ending Inventory
- Remaining inventory after sales: 50 units (total) - 40 units (sold) = 10 units
- Ending Inventory Value = 10 units * $5.60 = $56.00

### Summary:
- **FIFO**:
  - COGS: $220.00
  - Ending Inventory: $60.00

- **Weighted Average**:
  - COGS: $224.00
  - Ending Inventory: $56.00

Would you like more details or have any questions?

Here are 5 questions you can ask next:
1. Can you explain how the perpetual inventory system differs from the periodic inventory system?
2. How do you calculate COGS using the LIFO (Last-In, First-Out) method?
3. What impact does the choice of inventory valuation method have on financial statements?
4. Can you provide an example of how to calculate COGS and ending inventory using the specific identification method?
5. How does inflation affect the choice between FIFO and LIFO?

**Tip:** Always keep track of your inventory purchases and sales carefully to ensure accurate calculation of COGS and ending inventory.

Learn how to calculate the Cost of Goods Sold (COGS) and Ending Inventory using FIFO (First-In, First-Out) and Weighted Average methods. Includes step-by-step solutions and examples for inventory valuation under different scenarios.

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