In June, Terry decided to open a small retail operation selling bags of fertilizer to the public. He has decided to begin by offering two kinds of fertilizer. Below is the information for the month of June 2015, for the two types of fertilizer. Product Selling Price Feed All Fertilizer $27.00 Weed and Feed All Fertilizer $35.00 Purchase Data Date Product Quantity (Bags) Price per Bag 6/1/2015 Feed All Fertilizer 10 15.00 6/1/2015 Weed and Feed All Fertilizer 10 20.00 6/11/2015 Feed All Fertilizer 20 15.50 6/15/2015 Weed and Feed All Fertilizer 10 19.50 6/22/2015 Feed All Fertilizer 10 15.75 6/28/2015 Feed All Fertilizer 10 15.50 6/28/2015 Weed and Feed All Fertilizer 10 19.75 All purchases are paid in cash at the time of the purchase and Terry picks up the fertilizer from the distributor, so there is no freight charge. Sales Data (summarized by week) Date Product Quantity (Bags) 6/9/2015 Feed All Fertilizer 6 6/9/2015 Weed and Feed All Fertilizer 4 6/16/2015 Feed All Fertilizer 12 6/16/2015 Weed and Feed All Fertilizer 5 6/23/2015 Feed All Fertilizer 8 6/23/2015 Weed and Feed All Fertilizer 2 6/30/2015 Feed All Fertilizer 10 6/30/2015 Weed and Feed All Fertilizer 4 All sales are on credit. In addition to the sales, on 6/20/15, a customer returned one bag of Feed All Fertilizer to Terry for credit on account. Instructions: Calculate the Cost of Goods Sold and the Ending Inventory values for the fertilizer products under 1) Average Cost, 2) First-In, First-Out(FIFO), and 3) Last-In, First-Out (LIFO). You will need to calculate ending inventory from the purchase, sale and return data given, you may assume that a physical count confirmed your calculation of the number of units in ending inventory. Assume that Terry decides to use the FIFO method and compute the lower of cost or market (LCM) value to be reported for the end of June 2015. Use the last purchase prices for the market value. You only need to calculate cost under the FIFO method for this comparison. Prepare the Cost of Goods Sold section of the Income Statement. Product Selling Price Feed All Fertilizer $27.00 Weed and Feed All Fertilizer $35.00 Solution Calculation of Cost of Goods Available for Sale: Feed All Fertilizer Date Quantity (Bags) Price per Bag Cost A B A*B 6/1/15 10 $ 15.00 $ 150.00 6/11/15 20 $ 15.50 $ 310.00 6/22/15 10 $ 15.75 $ 157.50 6/28/15 10 $ 15.50 $ 155.00 Cost of Goods Available for Sale 50 $ 772.50 Weed and Feed All Fertilizer Date Quantity (Bags) Price per Bag Cost A B A*B 6/1/15 10 $ 20.00 $ 200.00 6/15/15 10 $ 19.50 $ 195.00 6/28/15 10 $ 19.75 $ 197.50 Cost of Goods Available for Sale 30 $ 592.50 1) Average Cost Method Feed All Fertilizer: Average Cost per unit = 772.50 / 50 = $ 15.45 Cost of Goods Sold = (6+12+8+10-1) = 35*15.45 $ 540.75 Cost of ending inventory = (50-35) = 15 *15.45 $ 231.75 Weed and Feed All Fertilizer: Average Cost per unit = 592.50 / 30 = $ 19.75 Cost of Goods Sold = (4+5+2+4) = 15*19.75 $ 296.25 Cost of ending inventory = (30-15) = 15 *.

1. In June, Terry decided to open a small retail operation selling bags of fertilizer to the public. He
has decided to begin by offering two kinds of fertilizer. Below is the information for the month
of June 2015, for the two types of fertilizer.
Product
Selling Price
Feed All Fertilizer
$27.00
Weed and Feed All Fertilizer
$35.00
Purchase Data
Date
Product
Quantity (Bags)
Price per Bag
6/1/2015
Feed All Fertilizer
10
15.00
6/1/2015
Weed and Feed All Fertilizer
10
20.00
6/11/2015
Feed All Fertilizer
20
15.50
6/15/2015
Weed and Feed All Fertilizer
10
19.50
6/22/2015
Feed All Fertilizer
10
15.75
6/28/2015

2. Feed All Fertilizer
10
15.50
6/28/2015
Weed and Feed All Fertilizer
10
19.75
All purchases are paid in cash at the time of the purchase and Terry picks up the fertilizer from
the distributor, so there is no freight charge.
Sales Data (summarized by week)
Date
Product
Quantity (Bags)
6/9/2015
Feed All Fertilizer
6
6/9/2015
Weed and Feed All Fertilizer
4
6/16/2015
Feed All Fertilizer
12
6/16/2015
Weed and Feed All Fertilizer
5
6/23/2015
Feed All Fertilizer
8
6/23/2015
Weed and Feed All Fertilizer
2
6/30/2015
Feed All Fertilizer
10
6/30/2015
Weed and Feed All Fertilizer

3. 4
All sales are on credit.
In addition to the sales, on 6/20/15, a customer returned one bag of Feed All Fertilizer to Terry
for credit on account.
Instructions:
Calculate the Cost of Goods Sold and the Ending Inventory values for the fertilizer products
under 1) Average Cost, 2) First-In, First-Out(FIFO), and 3) Last-In, First-Out (LIFO). You will
need to calculate ending inventory from the purchase, sale and return data given, you may
assume that a physical count confirmed your calculation of the number of units in ending
inventory.
Assume that Terry decides to use the FIFO method and compute the lower of cost or market
(LCM) value to be reported for the end of June 2015. Use the last purchase prices for the market
value. You only need to calculate cost under the FIFO method for this comparison.
Prepare the Cost of Goods Sold section of the Income Statement.
Product
Selling Price
Feed All Fertilizer
$27.00
Weed and Feed All Fertilizer
$35.00
Solution
Calculation of Cost of Goods Available for Sale:
Feed All Fertilizer
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/1/15
10
$ 15.00
$ 150.00

4. 6/11/15
20
$ 15.50
$ 310.00
6/22/15
10
$ 15.75
$ 157.50
6/28/15
10
$ 15.50
$ 155.00
Cost of Goods Available for Sale
50
$ 772.50
Weed and Feed All Fertilizer
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/1/15
10
$ 20.00
$ 200.00
6/15/15
10
$ 19.50
$ 195.00
6/28/15
10
$ 19.75
$ 197.50
Cost of Goods Available for Sale

5. 30
$ 592.50
1) Average Cost Method
Feed All Fertilizer:
Average Cost per unit = 772.50 / 50 =
$ 15.45
Cost of Goods Sold = (6+12+8+10-1) = 35*15.45
$ 540.75
Cost of ending inventory = (50-35) = 15 *15.45
$ 231.75
Weed and Feed All Fertilizer:
Average Cost per unit = 592.50 / 30 =
$ 19.75
Cost of Goods Sold = (4+5+2+4) = 15*19.75
$ 296.25
Cost of ending inventory = (30-15) = 15 *15.45
$ 296.25
2) First-In, First-Out(FIFO)
Feed All Fertilizer:
Cost of Goods Sold :
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/1/15
10
$ 15.00
$ 150.00
6/11/15
20
$ 15.50
$ 310.00
6/22/15

6. 5
$ 15.75
$ 78.75
Cost of Goods Sold
35
$ 538.75
Ending inventory =
Cost of Goods Available - Cost of Goods Sold
= 772.50-538.75 =
$ 233.75
Weed and Feed All Fertilizer:
Cost of Goods Sold :
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/1/15
10
$ 20.00
$ 200.00
6/15/15
5
$ 19.50
$ 97.50
Cost of Goods Sold
15
$ 297.50
Ending inventory =
Cost of Goods Available - Cost of Goods Sold
= 592.50-297.50 =
$ 295.00
3) Last-In, First-Out (LIFO)
Feed All Fertilizer:

7. Cost of Goods Sold :
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/28/15
10
$ 15.50
$ 155.00
6/22/15
10
$ 15.75
$ 157.50
6/11/15
15
$ 15.50
$ 232.50
Cost of Goods Sold
35
$ 545.00
Ending inventory =
Cost of Goods Available - Cost of Goods Sold
= 772.50-545 =
$ 227.50
Weed and Feed All Fertilizer:
Cost of Goods Sold :
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B

8. 6/28/15
10
$ 19.75
$ 197.50
6/15/15
5
$ 19.50
$ 97.50
15
$ 295.00
Ending inventory =
Cost of Goods Available - Cost of Goods Sold
= 592.50-295=
$ 297.50
Calculation of Cost of Goods Available for Sale:
Feed All Fertilizer
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/1/15
10
$ 15.00
$ 150.00
6/11/15
20
$ 15.50
$ 310.00
6/22/15
10
$ 15.75
$ 157.50
6/28/15

9. 10
$ 15.50
$ 155.00
Cost of Goods Available for Sale
50
$ 772.50
Weed and Feed All Fertilizer
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/1/15
10
$ 20.00
$ 200.00
6/15/15
10
$ 19.50
$ 195.00
6/28/15
10
$ 19.75
$ 197.50
Cost of Goods Available for Sale
30
$ 592.50
1) Average Cost Method
Feed All Fertilizer:
Average Cost per unit = 772.50 / 50 =
$ 15.45
Cost of Goods Sold = (6+12+8+10-1) = 35*15.45
$ 540.75
Cost of ending inventory = (50-35) = 15 *15.45

10. $ 231.75
Weed and Feed All Fertilizer:
Average Cost per unit = 592.50 / 30 =
$ 19.75
Cost of Goods Sold = (4+5+2+4) = 15*19.75
$ 296.25
Cost of ending inventory = (30-15) = 15 *15.45
$ 296.25
2) First-In, First-Out(FIFO)
Feed All Fertilizer:
Cost of Goods Sold :
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/1/15
10
$ 15.00
$ 150.00
6/11/15
20
$ 15.50
$ 310.00
6/22/15
5
$ 15.75
$ 78.75
Cost of Goods Sold
35
$ 538.75
Ending inventory =
Cost of Goods Available - Cost of Goods Sold
= 772.50-538.75 =

11. $ 233.75
Weed and Feed All Fertilizer:
Cost of Goods Sold :
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/1/15
10
$ 20.00
$ 200.00
6/15/15
5
$ 19.50
$ 97.50
Cost of Goods Sold
15
$ 297.50
Ending inventory =
Cost of Goods Available - Cost of Goods Sold
= 592.50-297.50 =
$ 295.00
3) Last-In, First-Out (LIFO)
Feed All Fertilizer:
Cost of Goods Sold :
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/28/15

12. 10
$ 15.50
$ 155.00
6/22/15
10
$ 15.75
$ 157.50
6/11/15
15
$ 15.50
$ 232.50
Cost of Goods Sold
35
$ 545.00
Ending inventory =
Cost of Goods Available - Cost of Goods Sold
= 772.50-545 =
$ 227.50
Weed and Feed All Fertilizer:
Cost of Goods Sold :
Date
Quantity (Bags)
Price per Bag
Cost
A
B
A*B
6/28/15
10
$ 19.75
$ 197.50
6/15/15
5
$ 19.50
$ 97.50
15

13. $ 295.00
Ending inventory =
Cost of Goods Available - Cost of Goods Sold
= 592.50-295=
$ 297.50