Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold

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

Jan. 1	Inventory	50 units @ $130
Mar. 10	Purchase	60 units @ $138
Aug. 30	Purchase	20 units @ $142
Dec. 12	Purchase	70 units @ $148

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Cost of Merchandise Inventory and Cost of Merchandise Sold
Inventory Method	Merchandise Inventory	Merchandise Sold
First-in, first-out (FIFO)	$	$
Last-in, first-out (LIFO)
Weighted average cost

Answer 1

Solution:

FIFO (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	50	$130.00	$6,500.00
Purchases:
10-Mar	60	$138.00	$8,280.00
30-Aug	20	$142.00	$2,840.00
12-Dec	70	$148.00	$10,360.00
Total Purchases	150		$21,480.00
Goods available for Sale	200		$27,980.00
Cost of goods sold:
Units from beginning inventory	50	$130.00	$6,500.00
Units from march 10 purchase	60	$138.00	$8,280.00
Units from Aug 30 purchase	10	$142.00	$1,420.00
Units from Dec 12 purchase	0	$148.00	$0.00
Total cost of goods sold	120		$16,200.00
Ending Inventory	80		$11,780.00

LIFO (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	50	$130.00	$6,500.00
Purchases:
10-Mar	60	$138.00	$8,280.00
30-Aug	20	$142.00	$2,840.00
12-Dec	70	$148.00	$10,360.00
Total Purchases	150		$21,480.00
Goods available for Sale	200		$27,980.00
Cost of goods sold:
Units from beginning inventory	0	$130.00	$0.00
Units from march 10 purchase	30	$138.00	$4,140.00
Units from Aug 30 purchase	20	$142.00	$2,840.00
Units from Dec 12 purchase	70	$148.00	$10,360.00
Total cost of goods sold	120		$17,340.00
Ending Inventory	80		$10,640.00

Weighted Average (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	50	$130.00	$6,500.00
Purchases:
10-Mar	60	$138.00	$8,280.00
30-Aug	20	$142.00	$2,840.00
12-Dec	70	$148.00	$10,360.00
Total Purchases	150		$21,480.00
Goods available for Sale	200	$139.90	$27,980.00
Cost of goods sold	120	$139.90	$16,788.00
Ending Inventory	80		$11,192.00