Question

Bufford Appliance uses a perpetual inventory system. For its flat-screen television sets, the January 1 inventory was 5 sets at $625 each. On January 10, Bufford purchased 6 units at $725 each. The company sold 3 units on January 8 and 4 units on January 15.

Compute the ending inventory under LIFO. (Round answer to 0 decimal places, e.g. 1,250.)

Compute the ending inventory under moving-average cost. (Round average-cost per unit to 2 decimal places, e.g. 12.50 and final answer to 0 decimal places, e.g. 1,250.)

Answer 1

• All working forms part of the answer
• Requirement 1

Ending Inventory under LIFO = $ 2,700

Schedule of Cost of Merchandise Sold
LIFO METHOD
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Jan-01							5	$     625.00	$               3,125.00
Jan-08			$                 -	3	625	$          1,875.00	2	$     625.00	$               1,250.00
Jan-10	6	$          725.00	$      4,350.00			$                     -	2	$     625.00	$               1,250.00
			$                 -			$                     -	6	$     725.00	$               4,350.00
Jan-15				4	$     725.00	$          2,900.00	2	$     625.00	$               1,250.00
			$                 -			$                     -	2	$     725.00	$               1,450.00
	6		$      4,350.00	7		$          4,775.00	4		$               2,700.00 = ANSWER

• Requirement 2

Ending Inventory under moving – average Cost = $ 2,800

Schedule of Cost of Merchandise Sold
Weighted Average
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Jan-01							5	$           625.00	$       3,125.00
Jan-08			$                       -	3	$    625.00	1875	2	$           625.00	$       1,250.00
Jan-10	6	$725.00	$            4,350.00			$                 -	8	$           700.00	$       5,600.00
Jan-15			$                       -	4	$    700.00	$       2,800.00	4	$           700.00	$       2,800.00
	Balances		$            4,350.00	7		$       4,675.00	4		$       2,800.00 = ANSWER