Question

You are provided with the following information for Sunland Inc. Sunland Inc. uses the periodic method of accounting for its inventory transactions. March 1 Beginning inventory 2,000 liters at a cost of 70¢ per liter. March 3 Purchased 2,500 liters at a cost of 74¢ per liter. March 5 Sold 2,300 liters for $1.05 per liter. March 10 Purchased 4,000 liters at a cost of 81¢ per liter. March 20 Purchased 2,500 liters at a cost of 89¢ per liter. March 30 Sold 5,200 liters for $1.25 per liter. Collapse question part (a1) Incorrect answer. Your answer is incorrect. Try again. Calculate the value of ending inventory that would be reported on the balance sheet, under each of the following cost flow assumptions. (Round answers to 2 decimal places, e.g. 125.50.)

(1) Specific identification method assuming: (i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,300 liters from the March 3 purchase; and (ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 450 liters from March 1; 550 liters from March 3; 2,900 liters from March 10; 1,300 liters from March 20.

(2) FIFO

(3) LIFO

Answer 1

Ending inventory
Specific identification method	$ 2,825.00
FIFO	$ 3,035.00
LIFO	$ 2,510.00
Weighted Average (Not part of the answer, Provided only for understanding purpose.)	$ 2,772.95

Unit Sold (2300+5200)			7500
Method	Specific Identification				Periodic Inventory System
date	Goods Available for sale			Cost of goods sold			Ending inventory
	Unit	unit cost	value	Unit	unit cost	value	Unit	unit cost	value
Beginning - March 1	2000	$           0.70	$      1,400.00	1450	$          0.70	$       1,015.00	550	$       0.70	$          385.00
Purchase - March 3	2500	$           0.74	$      1,850.00	1850	$          0.74	$       1,369.00	650	$       0.74	$          481.00
Purchase - March 10	4000	$           0.81	$      3,240.00	2900	$          0.81	$       2,349.00	1100	$       0.81	$          891.00
Purchase - March 20	2500	$           0.89	$      2,225.00	1300	$          0.89	$       1,157.00	1200	$       0.89	$      1,068.00
Total	11000		$      8,715.00	7500		$       5,890.00	3500		$      2,825.00
Method	First in First out				Periodic Inventory System
date	Goods Available for sale			Cost of goods sold			Ending inventory
	Unit	unit cost	value	Unit	unit cost	value	Unit	unit cost	value
Beginning - March 1	2000	$           0.70	$      1,400.00	2000	$          0.70	$       1,400.00
Purchase - March 3	2500	$           0.74	$      1,850.00	2500	$          0.74	$       1,850.00
Purchase - March 10	4000	$           0.81	$      3,240.00	3000	$          0.81	$       2,430.00	1000	$       0.81	$          810.00
Purchase - March 20	2500	$           0.89	$      2,225.00				2500	$       0.89	$      2,225.00
Total	11000		$      8,715.00	7500		$       5,680.00	3500		$      3,035.00
Method	Last in First out				Periodic Inventory System
date	Goods Available for sale			Cost of goods sold			Ending inventory
	Unit	unit cost	value	Unit	unit cost	value	Unit	unit cost	value
Beginning - March 1	2000	$           0.70	$      1,400.00				2000	$       0.70	$      1,400.00
Purchase - March 3	2500	$           0.74	$      1,850.00	1000	$          0.74	$          740.00	1500	$       0.74	$      1,110.00
Purchase - March 10	4000	$           0.81	$      3,240.00	4000	$          0.81	$       3,240.00
Purchase - March 20	2500	$           0.89	$      2,225.00	2500	$          0.89	$       2,225.00
Total	11000		$      8,715.00	7500		$       6,205.00	3500		$      2,510.00

Method	Weighted Average (Periodic Inventory System)
date	goods Available for sale
	Unit	unit cost	value
Beginning - March 1	2000	$           0.70	$      1,400.00
Purchase - March 3	2500	$           0.74	$      1,850.00
Purchase - March 10	4000	$           0.81	$      3,240.00
Purchase - March 20	2500	$           0.89	$      2,225.00
Total	11000		$      8,715.00
Cost of Goods Available for sale			8,715
Divided by: Units Available for sale			11,000
Weighted Average cost per unit			$   0.7922727
Cost of goods sold	7500	0.7922727	$      5,942.05
Ending inventory	3500	0.7922727	$      2,772.95