Question

On December 1, 2022, Matthias Company had the following account balances.

		Debit					Credit
Cash		$5,200			Accumulated Depreciation—Equipment		$1,300
Accounts Receivable		3,900			Accounts Payable		3,100
Inventory		1,680	*		Common Stock		21,400
Equipment		22,000			Retained Earnings		6,980
		$32,780					$32,780

*(2,800 x $0.60)

The following transactions occurred during December.

Dec. 3		Purchased 4,000 units of inventory on account at a cost of $0.78 per unit.
5		Sold 4,100 units of inventory on account for $0.90 per unit. (Matthias sold 2,800 of the $0.60 units and 1,300 of the $0.78.)
7		Granted the December 5 customer $90 credit for 100 units of inventory returned costing $72. These units were returned to inventory.
17		Purchased 2,000 units of inventory for cash at $0.80 each.
22		Sold 2,000 units of inventory on account for $0.95 per unit. (Matthias sold 2,000 of the $0.78 units.)

Adjustment data:

1.		Accrued salaries payable $390.
2.		Depreciation $210 per month. Compute ending inventory and cost of goods sold under FIFO, assuming Matthias Company uses the periodic inventory system. Ending Inventory $enter the ending inentory amount in dollars Cost of Goods Sold $enter the cost of goods sold amount in dollars

Compute ending inventory and cost of goods sold under LIFO, assuming Matthias Company uses the periodic inventory system.

Ending Inventory		$enter the ending inentory amount in dollars
Cost of Goods Sold		$enter the cost of goods sold amount in dollars

Answer 1

Cost of Goods Available for Sale
Activity	Units	Unit Price	Amount
Beginning Inventory	2800	$             0.60	$           1,680
Purchases
Dec. 3	4000	$             0.78	$           3,120
Dec. 17	2000	$             0.80	$           1,600
Total	8800		$           6,400

Units in ending Inventory = 8800 - 6100 + 100 = 2800 units

FIFO
Ending Inventory = 2000 x $0.80 + 800 x $0.78 = $2224
Cost of Goods Sold = $6480 - 2224 = $4256

LIFO
Ending Inventory = $1680
Cost of Goods Sold = $6480 - 1680 = $4800