Question
In: Accounting
LEFO Company uses the periodic inventory system to account for inventories. Information related to LEFO Company's...
LEFO Company uses the periodic inventory system to account for inventories. Information related to LEFO Company's inventory at March 31 is given below:
Date - Description - Units - Unit Cost
March 1 - Beg. Inventory - 10 units - $100
March 8 - Purchase - 10 units - $110
March 17 - Purchase - 10 units - $120
March 24 - Purchase - 10 units - $125
March 30 - Purchase - 10 units - $130
a. Calculate the value of ending inventory using the FIFO cost assumption if 15 units remain on hand at March 31. Calculate COGS.
b. Calculate the value of ending inventory using the LIFO cost assumption if 15 units remain on hand at March 31. Calculate COGS.
c. Calculate the value of ending inventory using the weighted-average cost cost assumption if 15 units remain on hand at March 31. Calculate COGS.
Solutions
Expert Solution
| Date | Description | Units | Unit cost | Total cost |
| March 1 | Beg. Inventory | 10 | 100 | 1000 |
| March 8 | Purchase | 10 | 110 | 1100 |
| March 17 | Purchase | 10 | 120 | 1200 |
| March 24 | Purchase | 10 | 125 | 1250 |
| March 30 | Purchase | 10 | 130 | 1300 |
| Goods available for sale | 50 | 5850 |
| a. FIFO method : In this method those goods are sold first which are purchased first and the ending inventory is from the latest purchases. | |
| Ending inventory = ( 10 * 130 ) + ( 5 * 125 ) | 1925 |
| COGS = Cost of goods available for sale - Ending inventory = 5850 - 1925 | 3925 |
| b. LIFO method : In this method those goods are sold first which are purchased last ( i.e. recently ) and the ending inventory is from beginning inventory and earlier purchases. | |
| Ending inventory = ( 10 * 100 ) + ( 5 * 110 ) | 1550 |
| COGS = Cost of goods available for sale - Ending inventory = 5850 - 1550 | 4300 |
| c. Weighted average cost method : | |
| Weighted average cost per unit = Cost of goods available for sale / Units of goods available for sale = 5850 / 50 | 117 |
| Ending inventory = Ending inventory units * Weighted average cost per unit = 15 * 117 | 1755 |
ekkarill92 answered 7 months agoRelated Solutions
Part 2 -McCubbin Company uses the periodic inventory system to account for inventories. Information related to...
Part 2 -McCubbin Company uses the periodic inventory system to
account for inventories. Information related to McCubbin Company's
inventory at October 31 is given below:
October
1 Beginning
inventory
300 units @ $10.00
= $
3,000
8
Purchase
900 units @ $10.40
=
9,360
16
Purchase
500 units @ $10.80
=
5,400
24
Purchase
300 units @ $11.60
=
3,480
Total units and
cost
2,000
units
$21,240
Instructions
1. Show calculations
to value the ending...
Kingsley Company uses the periodic inventory system to account for its inventories. Here are Kingsley’s inventory...
Kingsley Company uses the periodic inventory system to
account for its inventories. Here are Kingsley’s inventory records
for January and February of 2017:
Date
Event
Quantity
Cost per unit
Total Cost
January 1
Inventory on hand
15 units
$10/unit
$150
8
Purchase
20 units
$11/unit
$220
12
Purchase
40 units
$12/unit
$480
29
Purchase
50 units
$13/unit
$650
31
Ending inventory
20 units
?
?
February 8
Purchase
15 units
$14/unit
$210
15
Purchase
40 units
$15/unit
$600
22
Purchase...
Exercise 2: Inventory-Related Calculations in a Periodic System The Travalent Company uses the periodic inventory system. The...
Exercise 2: Inventory-Related Calculations in a Periodic
System
The Travalent Company uses the periodic inventory
system. The following information is taken from their
records. Certain data have been intentionally omitted.
Required: Compute the missing numbers.
2018
2019
2020
Sales
$4,000
$4,200
Sales Discounts
(20)
(25)
(30)
Sales Returns
(10)
(20)
(15)
Net Sales
Beginning Inventory
1,000
1,345
Purchases
3,000
2,700
Freight-In
150
200
250
Purchase Returns
(200)
(250)
(200)
Purchase Discounts
(100)
(150)
Net Purchases
3,000
Cost of Goods Available for...
Sunland Company uses a periodic inventory system. Details for the inventory account for the month of...
Sunland Company uses a periodic inventory system. Details for
the inventory account for the month of January 2022 are as
follows:
Units
Per unit price
Total
Balance, 1/1/2022
290
$5.00
$1450
Purchase, 1/15/2022
140
..5.10
714
Purchase, 1/28/2022
140
..5.30
742
An end of the month (1/31/2022) inventory showed that 230 units
were on hand. If the company uses FIFO and sells the units for $10
each, what is the gross profit for the month?
$1695
$1705
$3400
$2300
1. Effie Company uses a periodic inventory system. Details for the inventory account for the month...
1.
Effie Company uses a periodic inventory system. Details for the
inventory account for the month of January, 2013 are as
follows:
Units
Per unit price
Total
Balance, 1/1/13
200
$5.00
$1,000
Purchase, 1/15/13
100
5.30
530
Purchase, 1/28/13
100
5.50
550
An end of the month (1/31/13) inventory showed that 140 units were
on hand. If the company uses LIFO, what is the value of the ending
inventory?
A.
$742
B.
$728
C.
$762
D.
$700
2.
A company...
Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during...
Altira Corporation uses a periodic inventory system. The
following information related to its merchandise inventory during
the month of August 2018 is available:
Aug.1
Inventory on hand—3,000 units;
cost $6.50 each.
8
Purchased 12,000 units for $5.70
each.
14
Sold 9,000 units for $12.20
each.
18
Purchased 7,000 units for $5.20
each.
25
Sold 8,000 units for $11.20
each.
31
Inventory on hand—5,000
units.
Required:
Determine the inventory balance Altira would report in its August
31, 2018, balance sheet and...
Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during...
Altira Corporation uses a periodic inventory system. The
following information related to its merchandise inventory during
the month of August 2018 is available: Aug.1 Inventory on
hand—5,000 units; cost $7.90 each. 8 Purchased 22,000 units for
$6.70 each. 14 Sold 16,000 units for $13.20 each. 18 Purchased
12,000 units for $6.20 each. 25 Sold 15,000 units for $12.20 each.
31 Inventory on hand—8,000 units. Required: Determine the inventory
balance Altira would report in its August 31, 2018, balance sheet
and...
Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during...
Altira Corporation uses a periodic inventory system. The
following information related to its merchandise inventory during
the month of August 2018 is available:
Aug.1
Inventory on hand—7,000 units;
cost $8.10 each.
8
Purchased 20,000 units for $6.50
each.
14
Sold 15,000 units for $13.00
each.
18
Purchased 11,000 units for $6.00
each.
25
Sold 14,000 units for $12.00
each.
31
Inventory on hand—9,000
units.
Required:
Determine the inventory balance Altira would report in its August
31, 2018, balance sheet and...
Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during...
Altira Corporation uses a periodic inventory system. The
following information related to its merchandise inventory during
the month of August 2018 is available:
Aug.1
Inventory on hand—10,500 units; cost $8.40 each.
8
Purchased 29,000 units for $7.40 each.
14
Sold 20,500 units for $13.90 each.
18
Purchased 15,500 units for $6.90 each.
25
Sold 19,500 units for $12.90 each.
31
Inventory on hand—15,000 units.
Required:
Determine the inventory balance Altira would report in its August
31, 2018, balance sheet and...
Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during...
Altira Corporation uses a periodic inventory system. The
following information related to its merchandise inventory during
the month of August 2018 is available:
Aug.1
Inventory on hand—10,000 units; cost $8.00 each.
8
Purchased 26,000 units for $7.10 each.
14
Sold 19,000 units for $13.60 each.
18
Purchased 14,000 units for $6.60 each.
25
Sold 18,000 units for $12.60 each.
31
Inventory on hand—13,000 units.
Determine the inventory balance Altira would report in its
August 31, 2018, balance sheet and the...
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