Question

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

600

units

@ $40 per unit

Feb.

10

Purchase

400

units

@ $37 per unit

Mar.

13

Purchase

190

units

@ $15 per unit

Mar.

15

Sales

805

units

@ $70 per unit

Aug.

21

Purchase

190

units

@ $45 per unit

Sept.

5

Purchase

550

units

@ $43 per unit

Sept.

10

Sales

740

units

@ $70 per unit

Totals

1,930

units

1,545

units

    

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 190 from the March 13 purchase, 140 from the August 21 purchase, and 315 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.)

Answer 1

LIFO Method
Date	Goods Purchase( Units @ Cost)	Cost Of goods sold ( Units @ Cost)	Inventory ( Units @ Cost)	Balance ($)
1-Jan			600 @ $40	$2,400
10-Feb	400 @ $37 = $14800		600 @ $40 + 400 @ $37	$38,800
13-Mar	190 @ $15 = $2850		(600 @ $40) + (400 @ $37)+(190 @ $15)	$41,650
15-Mar		805 Units(600 @ $40 + 205 @ $37)=31585	(195 @ $37)+(190 @ $15)	$10,065
21-Aug	190 @ $45 = $8550		(195 @ $37)+(190 @ $15)+ (190 @ $45)	$18,615
5-Sep	550 @ $43 =23650		(195 @ $37)+(190 @ $15)+ (190 @ $45)+(550 @ $43)	$42,265
10-Sep		740 units (195 @ $37)+(190 @ $15)+ (190 @ $45)+(165 @ $43)=25710		$16,555

LIFO Method
Date	Goods Purchase( Units @ Cost)	Cost Of goods sold ( Units @ Cost)	Inventory ( Units @ Cost)	Balance ($)
1-Jan			600 @ $40	$2,400
10-Feb	400 @ $37 = $14800		600 @ $40 + 400 @ $37	$38,800
13-Mar	190 @ $15 = $2850		(600 @ $40) + (400 @ $37)+(190 @ $15)	$41,650
15-Mar		805 Units(190 @ $15)+(400 @ $37)+(215 @ $40)=$26250	(385 @ $40)	$15,400
21-Aug	190 @ $45 = $8550		(385 @ $40)+ (190 @ $45)	$23,950
5-Sep	550 @ $43 =23650		(385 @ $40)+ (190 @ $45)+(550 @ $43)	$47,600
10-Sep		740 units (550 @ $43)+(190 @ $45)= $32200	(385 @ $40)	$15,400

Wighted Average Method
Date	Goods Purchase( Units @ Cost)	Cost Of goods sold ( Units @ Cost)	Inventory ( Units @ Cost)	Balance ($)
1-Jan			600 @ $40	$2,400
10-Feb	400 @ $37 = $14800		600 @ $40 + 400 @ $37 (Average Cost $38.8)	$38,800
13-Mar	190 @ $15 = $2850		(600 @ $40) + (400 @ $37)+(190 @ $15)(Average Cost $35)	$41,650
15-Mar		805 Units @ $35=$28175	385 @ $35	$13,475
21-Aug	190 @ $45 = $8550		(385 @ $35)+ (190 @ $45)(Average Cost $38.30)	$22,025
5-Sep	550 @ $43 =23650		(385 @ $35)+ (190 @ $45)+(550 @ $43)(Average Cost $40.6)	$45,675
10-Sep		740 @ $40.6=30044	(385 @ $40.6)	$15,631

specific identification Method
Date	Goods Purchase( Units @ Cost)	Cost Of goods sold ( Units @ Cost)	Inventory ( Units @ Cost)	Balance ($)
1-Jan			600 @ $40	$2,400
10-Feb	400 @ $37 = $14800		600 @ $40 + 400 @ $37	$38,800
13-Mar	190 @ $15 = $2850		(600 @ $40) + (400 @ $37)+(190 @ $15)	$41,650
21-Aug	190 @ $45 = $8550		(600 @ $40) + (400 @ $37)+(190 @ $15)+(190 @ $45)	$50,200
5-Sep	550 @ $43 =23650		(600 @ $40) + (400 @ $37)+(190 @ $15)+(190 @ $45)+550 @ $43	$73,850
		(600 @ $40)+(300 @ $37)+(190 @ $15(140 @ $45)+(315 @ $43)= $157695		$16,055