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Essay by tinkerbell12345 November 2013

## Handout 7-1: Quickie Grocery

Quickie Grocery acquired the following five bottles of Corporate-Cola soft drink:

 Date Jan. 2 Jan. 10 Jan. 12 Jan. 16 Jan. 25 Cost \$1.00 \$2.00 \$3.00 \$4.00 \$5.00

A January 31 inventory count revealed that two bottles remained on the shelf.

How many bottles were sold in January? 3 bottles

Specific Identification

The Quickie Grocery keeps track of each individual bottle. Suppose the Grocery knows that it sold the bottles acquired on Jan. 2, 12 and 16.

 Date Jan. 2 Jan. 10 Jan. 12 Jan. 16 Jan. 25 Total Cost \$1.00 \$2.00 \$3.00 \$4.00 \$5.00 \$15.00 COGS \$1 \$3 \$4 \$5 Inv. \$2 \$5 \$7

What was the value of inventory on January 31?

What was the cost of goods sold for January?

First-in, First-out ("FIFO")

Assume that the first bottles purchased were the first to be sold. Last bottles are still here.

 Date Jan. 2 Jan. 10 Jan. 12 Jan. 16 Jan. 25 Total Cost \$1.00 \$2.00 \$3.00 \$4.00 \$5.00 \$15.00 COGS \$1 \$2 \$3 \$6 Inv. \$4 \$5 \$9

What was the value of inventory on January 31?

What was the cost of goods sold for January?

Last-in, First-out ("LIFO")

Assume that the last bottles purchased were the first to be sold.

First bottles are still here.

 Date Jan. 2 Jan. 10 Jan. 12 Jan. 16 Jan. 25 Total Cost \$1.00 \$2.00 \$3.00 \$4.00 \$5.00 \$15.00 COGS \$3 \$4 \$5 \$12 Inv. \$1 \$2 \$3

What was the value of inventory on January 31?

What was the cost of goods sold for January?

Weighted Average

Compute an average cost per unit, based on:

Cost of goods available for sale/No. of units available for sale \$ 15/5= \$3

 Date Jan. 2 Jan. 10 Jan. 12 Jan. 16 Jan. 25 Cost

What was the value of...