Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 40 units @ $126 Mar. 10 Purchase 70 units @ $138 Aug. 30 Purchase 30 units @ $144 Dec. 12 Purchase 60 units @ $146 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar. Cost of Merchandise Inventory and Cost of Merchandise Sold Inventory Method Merchandise Inventory Merchandise Sold a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) c. Weighted average cost $ 1000

Weighted Average Method is one of the methods of inventory valuation in which it is assumed that average cost per unit at the time of sale is used for output or sales unit. FIFO method is one of the methods of inventory valuation in which it is assumed that old purchases are first used for output or sales units. LIFO method is one of the methods of inventory valuation in which it is assumed that recent or new purchases are first used for output or sales units.Sales unit = Units in beginning inventory + Units purchased — Units in ending inventory= 40 + 70 + 30 + 60 — 80 = 120 Cost of goods sold:—Units soldCost per unitCost of goods sold(A)(B)(A×B)From beginning inventory 40$126$5,040From Mar.10 purchase 70$138$9,660From Aug 30 purchase 10$144$1,440Total120$16,140Ending inventory:—Units unsoldCost per unitEnding Inventory(A)(B)(A×B)From Aug 30 purchase 30-10= 20$144$2,880From Dec.12 purchase 60$146$8,760Total80$11,640Cost of goods sold:—Units soldCost per unitCost of goods sold(A)(B)(A×B)From beginning inventory 40$126$5,040From Mar.10 purchase 70$138$9,660From Dec.12 Purchase 60$146$8,760From Aug 30 purchase 30$144$4,320From Mar.10 purchase30$138$4,140Total120$17,220Ending inventory:—Units unsoldCost per unitEnding Inventory(A)(B)(A×B)From beginning inventory 40$126$5,040From Mar.10 purchase 70-30= 40$138$5,520Total80$10,560Units available for saleCost per unitCost of goods available for sale(A)(B)(A×B)From beginning inventory 40$126$5,040From Mar.10 purchase 70$138$9,660From Aug 30 purchase 30$144$4,320From Dec.12 purchase 60$146$8,760Total200$27,780Average cost per unit = Cost of goods available for sale ÷ Units available for sale= $27,780 ÷ 200= $138.90Cost of merchandise sold = Average cost per unit × Units sold = $138.90 × 120= $16,668 Cost of merchandise inventory= Cost of goods available for sale — Cost of merchandise sold = $27,780 — $16,668= $11,112Requirement #:—Merchandise InventoryMerchandise Solda) FIFO$11,640$16,140b) LIFO $10,560$17,220c) weighted average cost$11,112$16,668