In: Accounting
The basic data are presented below for the three years covered by the example: Year 1-Year 3. There were 40 units in beginning inventory at the start of Year 1. Each of these units had a cost basis of $30 per unit.
Year 1 Year 2 Year 3
Purchases Jan.22 120@$31 Feb.15 210@$36 Jun.20 280@$42
Mar.20 240@$32 Apr. 20 180@$38 Aug.30 300@$46
Jul.30 310@$33 Dec.17 100@$40
Sales Jan.11 20@$60 Jan.15 50@$70 Jul.16 220@$84
May 15 320@$60 Jul.30 150@$90 Nov.20 250@$90
Nov.25 300@$65 Dec.20 350@$90
Sales and purchases are the same numbers for a particular year regardless of the inventory method being used. Sales figures for Year 1-Year 3 are $39,900, $48,500 and $40,980, respectively. Purchases for the same three years, respectively, are $21,630, $18,400 and $25,560.
Ending inventories for each system and for each method will usually vary by year depending on the particular sequence of the purchases and the sales. There is one notable exception: FIFO will always produce the same result for the perpetual system as for the periodic system. [LIFO liquidation occurs during Year 2.]
Ending Inventories:
●Perpetual/Periodic FIFO Year 1 $_____
■Perpetual LIFO Year 1 $_____
●Periodic LIFO Year 1 $_____
■Periodic Weighted Average Year 1 $_____
●Perpetual Weighted Average Year 1 $_____