Question

Bailer Company's record of transactions for the month of November was the following:

Purchases:

Nov 1.	525 @ $7.00
5	1400 @ $7.20
8	750 @ $7.35
14	1,250 @ $7.42
21	825 @ $7.55
29	610 @ $7.80

Total units sold :  5,360

Sales

Nov 6.	550 @ $10
9	1,320 @ $10
10	625 @ 12
22	1,100 @ 12
28	850 @ 13

#1 - Assume periodic inventory records are kept in units only. Compute the inventory on November 30th using (a) LIFO and (b) average cost.

#2 - Assume perpetual inventory records are kept in dollars. Compute the inventory on November 30th using (a) FIFO and (b) LIFO.

#3 - Calculate the COGS (Cost of Goods Sold) assuming the periodic inventory method was used and the inventory was valued at FIFO.

#4 - If the company were experiencing an inflationary period, which inventory method will show the highest net income? (FIFO, LIFO, or average cost)

Answer 1

Under Inflationary period FIFO would show highest net income