10. Esplanade Company was formed on December 1, 2014. The
following information is available from Esplanade’s inventory records for Product BAP.
A physical inventory on March 31, 2015, shows 1,500 units on hand.
Instructions
Prepare schedules to compute the ending inventory at March 31, 2015, under each of the
following inven- tory methods (round to two decimal places).
(a) Specific identification. (b) FIFO. (C) Average.
Units Unit Cost
January 1, 2015 (beginning inventory) 600 R$ 8.00
Purchases:
January 5, 2015 1,100 9.00
January 25, 2015 1,300 10.00
February 16, 2015 800 11.00
March 26, 2015 60
0
12.00
(a) Specific identification:
Total cost of units on hand on March 31, 2015:
1,500 units x R$12.00 = R$18,000
(b) FIFO:
Ending inventory at March 31, 2015:
600 units x R$8.00 + 1,100 units x R$9.00 + (1,300 - 600) units x R$10.00 = R$8,750 + R$9,900 + R$7,000 = R$25,650
(c) Average:
Total cost of goods available for sale:
(600 units x R$8.00) + (1,100 units x R$9.00) + (1,300 units x R$10.00) + (800 units x R$11.00) + (600 units x R$12.00) = R$4,800 + R$9,900 + R$13,000 + R$8,800 + R$7,200 = R$43,700
Average cost per unit:
R$43,700 / 4,400 units = R$9.93
Ending inventory at March 31, 2015:
1,500 units x R$9.93 = R$14,895