Question

During June, the following changes in inventory item 27 took place:

June    1		Balance		1,470 units	@ $37
8		Sold		360 units	@ $70
10		Sold		1,110 units	@ $63
14		Purchased		890 units	@ $56
24		Purchased		680 units	@ $44
29		Sold		450 units	@ $65

Perpetual inventories are maintained.

a. What is the cost of the ending inventory for item 27 under the FIFO method?

b. What is the cost of the ending inventory for item 27 under the LIFO method?

Answer 1

a.

As per FIFO Method:

	Available for sale			Cost of goods sold			Ending Inventory
Date	Units	Unit cost	Total Cost	Units	Unit cost	Total Cost	Units	Unit Cost	Total Cost
Jun-01							1,470	37	54,390
Jun-08				360	37	13,320	1,110	37	41,070
Jun-10				1,110	37	41,070	0	0	0
Jun-14	890	56	49,840				890	56	49,840
Jun-24	680	44	29,920				890	56	49,840
							680	44	29,920
Jun-29				450	56	25,200	440	56	24,640
							680	44	29,920
Total						79,590	1,120		54,560

Cost of the ending inventory = $54,560

b.

As per LIFO Method:

	Available for sale			Cost of goods sold			Ending Inventory
Date	Units	Unit cost	Total Cost	Units	Unit cost	Total Cost	Units	Unit Cost	Total Cost
Jun-01							1,470	37	54,390
Jun-08				360	37	13,320	1,110	37	41,070
Jun-10				1,110	37	41,070	0	0	0
Jun-14	890	56	49,840				890	56	49,840
Jun-24	680	44	29,920				890	56	49,840
							680	44	29,920
Jun-29				450	44	19,800	890	56	49,840
							230	44	10,120
Total						74,190	1,120		59,960

Cost of the ending inventory = $59,960