Question

Inventory information for Part 311 of Oriole Corp. discloses the following information for the month of June.

June   1		Balance		299 units @ $16		June 10		Sold		196 units @ $38
11		Purchased		803 units @ $19		15		Sold		502 units @ $40
20		Purchased		505 units @ $21		27		Sold		297 units @ $43

Assuming that the periodic inventory method is used, compute the cost of goods sold and ending inventory under (1) LIFO and (2) FIFO.

		(1) LIFO		(2) FIFO
Cost of Goods Sold		$enter a dollar amount		$enter a dollar amount
Ending Inventory		$enter a dollar amount		$enter a dollar amount

  

  

Question Part Score

--/12

Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the value of the ending inventory at LIFO?

The ending inventory at LIFO

$enter The ending inventory at LIFO in dollars

  

  

Question Part Score

--/3

Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the gross profit if the inventory is valued at FIFO?

Gross Profit (FIFO)

$enter the Gross Profit (FIFO) in dollars

  

  

Answer 1

Correct Answer:

Requirement 1:

	FIFO	LIFO
Cost of Goods Sold	$       18,008	$            19,915
Cost of Ending Inventory	$       12,638	$            10,731

Working:

Cost of Goods Available for sale
	Units	Cost per unit	value
Beginning Inventory	299	$              16.00	$            4,784.0
Purchases	803	$              19.00	$         15,257.0
Purchases	505	$              21.00	$       10,605.00
Total	1607		$             30,646

	FIFO
A	Total Units Available for sale			1607			$               30,646
	Units Sold			995
	Ending Inventory Units			612
	Valuation
	Cost of Goods Sold		299		$               16.00		$            4,784.00
			696		$               19.00		$               13,224
B	Cost of Goods Sold		995	units			$               18,008
A-B	Ending Inventory		612	units			$               12,638

	LIFO
A	Total Units Available for sale			1607			$               30,646
	Units Sold			995
	Ending Inventory Units			612
	Valuation
	Cost of Goods Sold		505		$               21.00		10,605.00
			490		$               19.00		9,310.00
							-
B	Cost of Goods Sold		995	units			$         19,915.00
A-B	Ending Inventory		612	units			$         10,731.00

Requirement 2:

Perpetual	LIFO
Cost of Ending Inventory	$            11,735

Working:

	LIFO
A	Total Units Available for sale			1607			$               30,646
	Units Sold			995
	Ending Inventory Units			612
	Valuation
	Cost of Goods Sold		196		$               16.00		3,136.00
			502		$               19.00		9,538.00
			297		$               21.00		6,237.00
B	Cost of Goods Sold		995	units			$         18,911.00
A-B	Ending Inventory		612	units			$         11,735.00

Requirement 3:

Perpetual	FIFO
Gross profit	$       22,291

Working:

Note: in FIFO inventory method, perpetual and periodic balance remain the same. Therefore, the cost of goods sold will be same as in periodic FIFO

		FIFO
A	Sales Revenue (196*38)+(502*40)+(297*43)	$                         40,299
B	Cost of goods sold	$                         18,008
C =A-B	Gross Margin	$                         22,291

End of Answer.

Thanks