Question

Periodic Inventory by Three Methods

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	1,080 units @ $124
Feb. 17	Purchase	1,440 units @ $125
July 21	Purchase	1,655 units @ $126
Nov. 23	Purchase	1,145 units @ $126

There are 1,220 units of the item in the physical inventory at December 31. The periodic inventory system is used.

a. Determine the inventory cost by the first-in, first-out method.
$fill in the blank 1

b. Determine the inventory cost by the last-in, first-out method.
$fill in the blank 2

c. Determine the inventory cost by the weighted average cost method. Do not round intermediate calculation and round final answer to the nearest whole dollar.
$fill in the blank 3

Answer 1

Solution

	Cost of Ending inventory
FIFO	$         153,720
LIFO	$         151,420
Weighted average	$         152,894

Working

	Units	Cost per unit	value
Beginning Balance	1080	$                 124.00	$ 133,920
Purchases
	1440	$                 125.00	$ 180,000
	1655	$                 126.00	$ 208,530
	1145	$                 126.00	$ 144,270
Cost of goods available for sale	5320		$ 666,720

.

Average Cost of Inventory
Units	(A)	5320
Total Cost	(B)	$ 666,720
Average Cost	(C=B/A)	$ 125.32

.

FIFO
Total Units Available for sale		5320
Units Sold		4100
Closing Stock in Units		1220
Valuation
Ending Inventory	1145	@	$           126.00	$   144,270.00
	75	@	$           126.00	$        9,450.00
Value Of Ending Inventory				$   153,720.00

.

LIFO
Total Units Available for sale		5320
Units Sold		4100
Closing Stock in Units		1220
Valuation
Ending Inventory	1080	@	$           124.00	$ 133,920
	140	@	$           125.00	$ 17,500
Value Of Ending Inventory				$         151,420

.

Weighted Average method
Total Units Available for sale		5320
Units Sold		4100
Closing Stock in Units		1220
Valuation
Ending Inventory	1220	@	$           125.32	$         152,894