The Nashville Merchandise Company started business on August 1, 2015. The following purchases were made during August on the dates indicated:
Units Purchased Unit Cost
August 10 2,500 $10
August 15 12,500 $11
August 27 4,000 $14
The company made the following sales during August:
units Sold Selling Price
August 20 6,000 $20
August 31 5,000 $20
Determine the cost of goods sold and the cost of ending inventory based on each of the following methods of inventory valuation. For each scenario assume that Nashville uses a perpetual inventory system EXCEPT for scenario (d) in which the periodic inventory method system is used.
(a) First-in, First-out
(b) Last-in, Last-out
(c) Weighted-Average
(d) Weighted-Average
Use periodic inventory method