Inventories and Cost of Goods Sold: FIFO, Weighted Average, and

School: University of California, Berkeley - Course: UGBA 127 - Subject: Accounting

Topic 6, Inventories and Cost of Goods Sold (COGS) CAFÉ STRADA Café STRADA purchases fruit cups for resale. During 20xx, its first year of operations, its purchases of fruit cups were as follows: QuantityCost per UnitTotal Cost January 3 Purchase4604.30$ 1,978 $ May 12 Purchase6704.20$ 2,814 $ August 12 Purchase5004.16$ 2,080 $ October 22 Purchase8704.10$ 3,567 $ Totals250010,439 $ The fruit cups inventory on 12.31.20xx includes 420 fruit cups. Required -as of December 31, 20xx, compute the following under the FIFO, Weighted Average, and the LIFO cost flow assumptions: A.Goods Available for Sale (hint: use the formula Goods Available for Sale -Ending Inventory = COGS) B.Ending balance of Inventory as of the end of the year. C.COGS for the year 20xx. 1)FIFO A. Good available for sale = total cost of goods = $10,439 B. Ending balance of inventory = 420*4.1 = $1722 C. COGS = 10439 -1722 = $8717 2)Weighted Average A. Good available for sale = total cost of goods = $10,439 B. Ending balance of inventory = 10439/2500 *420 = $1754 C. COGS = 10439 -1754 = $8685