You have the following information for Bridgeport Corp. for the month ended October 31, 2017. Bridgeport Corp. uses a periodic method for inventory. Date Description Units Unit Cost or Selling Price
Oct. 1 Beginning inventory 60 $24
Oct. 9 Purchase 125 26
Oct. 11 Sale 107 37
Oct. 17 Purchase 94 27
Oct. 22 Sale 64 42
Oct. 25 Purchase 71 29
Oct. 29 Sale 104 42

Required:
a. Calculate the weighted-average cost.
b. Calculate ending inventory, cost of goods sold, gross profit under each of the following methods.

1. LIFO
2. FIFO
3. Avergae Cost

Bridgeport Corp.

a. Weighted-average cost:

Weighted average cost = Cost of goods available for sale = $9,287

b. Ending inventory, cost of goods sold, gross profit under:

1. LIFO:

a) Ending Inventory = 75 units

Oct. 1 Beginning inventory 60 at $24  = $1,440

Oct. 9 Purchase                  15 at $26 =      390

Total                                    75             =  $1,830

b) Cost of goods sold = Cost of goods available for sale minus the ending inventory

= $9,287 - $1,830

= $7,457

c) Gross profit = Sales minus Cost of goods sold

= $11,015 - $7,457

= $3,558

2. FIFO:

a) Ending Inventory = 75 units

Oct. 17 Purchase 4 at $27  =      $108

Oct. 25 Purchase 71 at $29 = 2,059

Ending Inventory 75              $2,167

b) Cost of goods sold = Cost of goods available for minus Ending Inventory

= $9,287 - $2,167

= $7,120

c) Gross profit = Sales minus Cost of goods sold

= $11,015 - $7,120

= $3,895

3. Average Cost:

a) Ending Inventory = 75 units

= Ending Inventory units x Weighted-Average cost

= 75 x $26.53 = $1,989.75

b) Cost of goods sold = units sold x weighted-average cost

= 275 x $26.53

= $7,295.75

c) Gross profit = Sales minus Cost of goods sold

= $11,015 - $7,295.75

= $3,719.25

Explanation:

a) Data and calculations:

Date     Description Units       Unit    Cost  Selling Price   Total

Oct. 1    Beginning inventory   60     $24                           $1,440

Oct. 9   Purchase                   125       26                            3,250

Oct. 11  Sale                           (107)                     $37                         $3,959

Oct. 17  Purchase                   94      27                              2,538

Oct. 22 Sale                          (64)                       42                            2,688

Oct. 25 Purchase                   71        29                            2,059

Oct. 29 Sale                        (104)                       42                           4,368

Total                                   350 (275)                             $9,287    $11,015

Ending inventory in units = 350 - 275 = 75

Weighted average cost = $9,287

Weighted average cost per unit = $9,287/350 = $26.53

b) The LIFO is the Last-in, First-Out method of inventory costing which assumes that units bought last are the units to be sold first.

c) FIFO means the First-in, First-Out method of inventory costing.  This takes the assumption that units bought first are the units to be sold first in that chronological order.

d) Weighted average method of inventory costing takes the weighted average cost and uses this to value the ending inventory and the cost of goods sold.

e) The periodic inventory system does not alter the value of inventory until at the end of the accounting period when the inventory count is done, reconciled, and valued.

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