Question

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:

Aug.1	Inventory on hand—2,700 units; cost $6.80 each.
8	Purchased 13,500 units for $6.20 each.
14	Sold 10,800 units for $12.70 each.
18	Purchased 8,100 units for $5.60 each.
25	Sold 9,800 units for $11.70 each.
28	Purchased 4,700 units for $5.80 each.
31	Inventory on hand—8,400 units.

Required:
1. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using the FIFO method.

2. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using the Average cost method. (Round "Average Cost per Unit" to 2 decimal places.)

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD
	RECIEPTS	COST OF GOODS SOLD	BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
01-Aug							2700	6.8	18360
08-Aug	13500	6.2	83700				2700	6.8	18360
							13500	6.2	83700
14-Aug				2700	6.8	18360
				8100	6.2	50220	5400	6.2	33480
18-Aug	8100	5.6	45360				5400	6.2	33480
							8100	5.6	45360
25-Aug				5400	6.2	33480
				4400	5.6	24640	3700	5.6	20720
28-Aug	4700	5.8	27260				3700	5.6	20720
							4700	5.8	27260
TOTAL	26300		156320	20600		126700	8400		47980
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL WEIGHTED AVERAGE METHOD
	RECIEPTS	COST OF GOODS SOLD	BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
01-Aug							2700	6.8	18360
08-Aug	13500	6.2	83700				2700	6.8	18360
							13500	6.2	83700
Average							16200	6.3	102060
14-Aug				10800	6.3	68040	5400	6.3	34020
18-Aug	8100	5.6	45360				5400	6.3	34020
							8100	5.6	45360
Average							13500	5.88	79380
25-Aug				9800	5.88	57624	3700	5.88	21756
28-Aug	4700	5.8	27260				3700	5.88	21756
							4700	5.8	27260
Average							8400	5.84	49016
TOTAL	26300		156320	20600		125664	8400	5.84	49016
			FIFO	Average
Ending inventory cost	47980	49016
Cost of goods sold		126700	125664