# Formula for Cost of Goods Sold

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Name:                                                         Date:
Instructor:                                                    Course:
Financial Accounting, Fifth Edition by Kimmel, Weygandt, and Kieso
Solving Financial Accounting Problems Using Microsoft Excel for Windows
by Rex A Schildhouse
P6-3B, Determine cost of goods sold and ending inventory using FIFO, LIFO, and average cost in a periodic
inventory system, and assess financial statement effects.
Timmons Company had a beginning inventory on January 1 of                         100         units of Product SXL at
a cost of       \$20.00        per unit. During the year, purchases were:
Mar 15          300           @        \$23.00                         Sep 4           350           @        \$28.00
Jul 20         250           @        \$25.00                         Dec 2           100           @        \$30.00
Timmons Company sold                800          units, and it uses a periodic inventory system.

Instructions:
(a) Determine the cost of goods available for sale.
COST OF GOODS AVAILABLE FOR SALE
Date                Explanation        Units      Unit Cost                        Total Cost
Jan 1    Text                          Quantity      Amount                           Formula
Date       Text                          Quantity      Amount                           Formula
Date       Text                          Quantity      Amount                           Formula
Date       Text                          Quantity      Amount                           Formula
Date       Text                          Quantity      Amount                           Formula
Total                                     Formula                                        Formula

(b) Determine the ending inventory and the cost of goods sold under each of the assumed cost flow methods (FIFO,
LIFO, and average cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. (Round
average unit cost to three decimal places.)
(b)(1) FIFO                                                  (b)(2) FIFO
Ending Inventory                                           Cost of Goods Sold
Date         Units     Unit Cost Total Cost               Cost of goods available for sale     Amount
Date         Quantity    Amount    Formula                Title                                Amount
Date         Quantity    Amount    Formula                Title                                Formula
Formula               Formula

Proof of Cost of Goods Sold
Date               Units           Unit Cost          Total Cost
Date                  Quantity          Amount             Formula
Date                  Quantity          Amount             Formula
Date                   Quantity          Amount             Formula
Date                   Quantity          Amount             Formula
Formula                              Formula

Name:                                                       Date:
Instructor:                                                    Course:
Financial Accounting, Fifth Edition by Kimmel, Weygandt, (2) LIFO
(b) (1) LIFO                                    (b) and Kieso
Ending Inventory                                           Cost of Goods Sold
Date       Units    Unit Cost Total Cost                 Cost of goods available for sale        Amount
Date       Quantity   Amount    Formula                  Title                                   Amount
Date       Quantity   Amount    Formula                  Title                                   Formula
Formula              Formula

Proof of Cost of Goods Sold
Date             Units           Unit Cost          Total Cost
Date                Quantity          Amount             Formula
Date                Quantity          Amount             Formula
Date                Quantity          Amount             Formula
Date                Quantity          Amount             Formula
Formula                              Formula

(b)(1) Average Cost                                         (b)(2)   Average Cost
Ending Inventory                                        Cost of Goods Sold
Inventory cost =                             Amount         Cost of goods available for sale        Amount
Total units =                                Quantity       Title                                   Amount
Title                                        Formula        Title                                   Formula

Ending inventory units =                     Quantity                Proof of Cost of Goods Sold
Title                                        Amount         Title                                  Formula
Title                                        Formula        Units sold =                           Quantity
Title                                  Formula

(c) Which cost flow method results in the highest inventory amount for the balance sheet? The highest cost of goods sold
for the income statement?