e6-14 - method. Solution: a. FIFO method (36 units*$165 +14...

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The units of an item available for sale during the year were as follows: Jan. 1 Inventory 27 units at $120 Feb. 17 Purchase 54 units at $138 July 21 Purchase 63 units at $156 Nov. 23 Purchase 36 units at $165 There are 50 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost by (a) the firstin, first-out method, (b) the last-in, first-out method, and (c) the average cost
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Unformatted text preview: method. Solution: a. FIFO method (36 units*$165 +14 units*$156) = $5,940 + $2,184 = $8,124 b. (27 units*$120 + 23 units*$138) = $3,240 + $3,174 = $6,414 c. $7,350 (50 units at $147; $26,460/180 units = $147) Cost of merchandise available for sale: 27 units at $120 = $ 3,240 54 units at $138= 7,452 63 units at $156= 9,828 36 units at $165= 5,940 180 units (at average cost of $147= $26,460...
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