Question

Cheyenne Corp. uses the periodic inventory system and had 160 units in beginning inventory at a total cost of $20,000. The company purchased 320 units at a total cost of $49,600. At the end of the year, Cheyenne had 85 units in ending inventory.

(a) Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round average-cost per unit and final answers to 0 decimal places, e.g. 1,250.) FIFO LIFO Average-cost The cost of the ending inventory $ $ $ The cost of goods sold $ $ $

Answer 1

• Requirement [a]

	FIFO	LIFO	Average Cost
Ending Inventory	$    13,175.00	$            10,625.00	$               12,325.00
Cost of Goods Sold	$    56,425.00	$            58,975.00	$               57,275.00

• Workings

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	160	$              125.00	$                      20,000.00	160	$             125.00	$               20,000.00	0	$              125.00	$                         -
Purchases:
	320	$              155.00	$                      49,600.00	235	$             155.00	$               36,425.00	85	$              155.00	$          13,175.00
TOTAL	480		$                      69,600.00	395		$               56,425.00	85		$          13,175.00
LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	160	$              125.00	$                      20,000.00	75	$             125.00	$                 9,375.00	85	$              125.00	$          10,625.00
Purchases:
	320	$              155.00	$                      49,600.00	320	$             155.00	$               49,600.00	0	$              155.00	$                         -
TOTAL	480		$                      69,600.00	395		$               58,975.00	85		$          10,625.00
Average Method	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	160	$              125.00	$                      20,000.00
Purchases:
	320	$              155.00	$                      49,600.00
TOTAL	480	$         145.0000	$                      69,600.00	395	$        145.0000	$               57,275.00	85	$          145.0000	$          12,325.00