Question

Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods

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

Jan. 1	Inventory	9	units at $28	$252
July 7	Purchase	6	units at $31	186
Nov. 23	Purchase	14	units at $33	462
		29	units	$900

There are 17 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method (round per unit cost to two decimal places and your final answer to the nearest whole dollar).

a.	First-in, first-out (FIFO)	$
b.	Last-in, first-out (LIFO)	$
c.	Weighted average cost	$

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Answer 1

	FIFO	LIFO	Weighted Average
Cost of Goods available for sale	$                   900	$                900	$               900
Ending Inventory	$                   555	$                500	$               528
Cost of Goods Sold	$                   345	$                400	$               372

Working note

	Units	Cost per unit	value
Beginning Balance	9	$             28.00	$         252.00
Purchases
7-Jan	6	$             31.00	$         186.00
23-Nov	14	$             33.00	$         462.00
	29		$      900.000

Average Cost of Inventory
Units	(A)	29
Total Cost	(B)	$          900.00
Average Cost	(C=B/A)	$             31.03

FIFO
Total Units Available for sale		29
Units Sold		12
Closing Stock in Units		17
Valuation
Ending Inventory	14	@	$           33.00	$                    462
	3	@	$           31.00	$                       93
Value Of Ending Inventory				$                    555
Cost of Goods sold	(900-555)			$                    345

               

LIFO
Total Units Available for sale		29
Units Sold		12
Closing Stock in Units		17
Valuation
Ending Inventory	9	@	$           28.00	$                    252
	8	@	$           31.00	$                    248
Value Of Ending Inventory				$                    500
Cost of Goods sold	(900-500)			$                    400

Weighted Average method
Total Units Available for sale		29
Units Sold		12
Closing Stock in Units		17
Valuation
Ending Inventory	17	@	$           31.03	$                    528
Value Of Ending Inventory				$                    528
Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$                    372