Inventory cost flow methods; periodic system
Response to the following problem:
Samuelson and Messenger (S&M) began 2016 with 200 units of its one product. These units were purchased near the end of 2015 for $25 each. During the month of January, 100 units were purchased on January 8 for $28 each and another 200 units were purchased on January 19 for $30 each. Sales of 125 units and 100 units were made on January 10 and January 25, respectively. There were 275 units on hand at the end of the month. S&M uses a periodic inventory system.
Calculate ending inventory and cost of goods sold for January using (1) FIFO, and (2) average cost.