Question

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Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March.  

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

150

units

@ $40 per unit

Mar.

5

Purchase

450

units

@ $45 per unit

Mar.

9

Sales

470

units

@ $75 per unit

Mar.

18

Purchase

220

units

@ $50 per unit

Mar.

25

Purchase

300

units

@ $52 per unit

Mar.

29

Sales

260

units

@ $85 per unit

Totals

1,120

units

730

units

For specific identification, the March 9 sale consisted of 40 units from beginning inventory and 430 units from the March 5 purchase; the March 29 sale consisted of 90 units from the March 18 purchase and 170 units from the March 25 purchase.

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d)specific identification. (Round your average cost per unit to 2 decimal places.)

Answer 1

• All working forms part of the answer
• Requirement asked: Requirement 3: Cost Assigned to Ending Inventory

Periodic Inventory System
	FIFO Method	LIFO Method	Specific Identification Method	Average-Cost Method
Cost of Ending Inventory = ANSWER	$     20,100	$       16,800	$            18,560	$           18,404
Cost of goods sold [for understanding]	$     32,750	$       36,050	$            34,290	$           34,449

• Working

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	150	$                40.00	$                        6,000.00	150	$         40.00	$           6,000.00	0	$        40.00	$                         -
Purchases:
05-Mar	450	$                45.00	$                      20,250.00	450	$         45.00	$        20,250.00	0	$        45.00	$                         -
18-Mar	220	$                50.00	$                      11,000.00	130	$         50.00	$           6,500.00	90	$        50.00	$            4,500.00
25-Mar	300	$                52.00	$                      15,600.00	0	$         52.00	$                        -	300	$        52.00	$          15,600.00
TOTAL	1120		$                      52,850.00	730		$        32,750.00	390		$          20,100.00
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	150	$                40.00	$                        6,000.00	0	$         40.00	$                        -	150	$        40.00	$            6,000.00
Purchases:
05-Mar	450	$                45.00	$                      20,250.00	210	$         45.00	$           9,450.00	240	$        45.00	$          10,800.00
18-Mar	220	$                50.00	$                      11,000.00	220	$         50.00	$        11,000.00	0	$        50.00	$                         -
25-Mar	300	$                52.00	$                      15,600.00	300	$         52.00	$        15,600.00	0	$        52.00	$                         -
TOTAL	1120		$                      52,850.00	730		$        36,050.00	390		$          16,800.00
Specific Identification	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	150	$                40.00	$                        6,000.00	40	$         40.00	$           1,600.00	110	$        40.00	$            4,400.00
Purchases:
05-Mar	450	$                45.00	$                      20,250.00	430	$         45.00	$        19,350.00	20	$        45.00	$                900.00
18-Mar	220	$                50.00	$                      11,000.00	90	$         50.00	$           4,500.00	130	$        50.00	$            6,500.00
25-Mar	300	$                52.00	$                      15,600.00	170	$         52.00	$           8,840.00	130	$        52.00	$            6,760.00
TOTAL	1120		$                      52,850.00	730		$        34,290.00	390		$          18,560.00

Weighted Average (Periodic)	Units	Cost per unit	Total
Beginning Inventory	150	$    40.00	$       6,000.00
Purchases:
05-Mar	450	$    45.00	$     20,250.00
18-Mar	220	$    50.00	$     11,000.00
25-Mar	300	$    52.00	$     15,600.00
00-Jan	0	$           -	$                    -
Total Purchases	970		$     46,850.00
Goods Available for Sales	1120		$     52,850.00
Weighted Average cost per unit		$ 47.188
Cost of Goods Sold	730	$ 47.190	$     34,448.70
Ending Inventory	390	$ 47.190	$     18,404.10