Question

FIFO and LIFO Costs Under Perpetual Inventory System The following units of an item were available for sale during the year:

Beginning inventory 20 units at $48

Sale 17 units at $72

First purchase 18 units at $51

Sale 6 units at $74

Second purchase 28 units at $53

Sale 13 units at $76

The firm uses the perpetual inventory system, and there are 30 units of the item on hand at the end of the year.

a. What is the total cost of the ending inventory according to FIFO? $ b. What is the total cost of the ending inventory according to LIFO?

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 $
a.							20	48	960
b.				17	48	816	3	48	144
c.	18	51	918				3	48	144
							18	51	918
d.				3	48	144
				3	51	153	15	51	765
e.	28	53	1484				15	51	765
							28	53	1484
f.				13	51	663	2	51	102
							28	53	1484
TOTAL	46		2402	36		1776	30		1586
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
a.							20	48	960
b.				17	48	816	3	48	144
c.	18	51	918				3	48	144
							18	51	918
d.				6	51	306	3	48	144
							12	51	612
e.	28	53	1484				3	48	144
							12	51	612
							28	53	1484
f.				13	53	689	3	48	144
							12	51	612
							15	53	795
TOTAL	46		2402	36		1811	30		1551