Question

Oriole Football Shop began operations on January 2, 2017. The following stock record card for footballs was taken from the records at the end of the year.

Date		Voucher		Terms		Units Received				Unit Invoice Cost		Gross Invoice Amount
1/15		10624		Net 30			55			$24			$1,320
3/15		11437		1/5, net 30			70			19			1,330
6/20		21332		1/10, net 30			95			18			1,710
9/12		27644		1/10, net 30			89			14			1,246
11/24		31269		1/10, net 30			81			13			1,053
		Totals					390						$6,659

A physical inventory on December 31, 2017, reveals that 112 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Oriole Football Shop uses the invoice price less discount for recording purchases.

Compute the December 31, 2017, inventory using the FIFO method.

Compute the 2017 cost of goods sold using the LIFO method.

Answer 1

Inventory as on 31 Dec 2017, as per FIFO
Total receipts=	390	units
Closing stock =	112	units
Total sales    =	278	units
Date	Units purchased	Cumulative Units	Sales	Closing stock	Unit cost	Discount	Value of closing inventory
15-Jan	55	55	Sold	0	$24	0%	$0
15-Mar	70	125	Sold	0	$19	1%	$0
20-Jun	95	220	Sold	0	$18	1%	$0
12-Sep	89	309	58 units sold, 31 in stock	31	$14	1%	$430
24-Nov	81	390	81 still in stock	112	$13	1%	$1,441
							$1,871
Since, Company is following FIFO method of valuating inventory it would have sold all the 220 units purchased till 20 June
and remaining 58 units must have sold out of the stock purchased on 12 sep.
Cost of goods sold using the LIFO method
Date	Units purchased	Cumulative units	Sales	Unit cost	Discount	COGS
24-Nov	81	81	81	$13	1%	$1,042.47
12-Sep	89	170	89	$14	1%	$1,233.54
20-Jun	95	265	95	$18	1%	$1,692.90
15-Mar	70	335	13	$19	1%	$244.53
15-Jan	55	390	0	$24	0	$0.00
			278			$4,213.44