Question

Required information

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Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

160

units

@ $50 per unit

Mar.

5

Purchase

460

units

@ $55 per unit

Mar.

9

Sales

480

units

@ $85 per unit

Mar.

18

Purchase

240

units

@ $60 per unit

Mar.

25

Purchase

320

units

@ $62 per unit

Mar.

29

Sales

280

units

@ $95 per unit

Totals

1,180

units

760

units

For specific identification, the March 9 sale consisted of 60 units from beginning inventory and 420 units from the March 5 purchase; the March 29 sale consisted of 100 units from the March 18 purchase and 180 units from the March 25 purchase.

3. Compute the cost assigned to ending inventory using

(a) FIFO,

(b) LIFO,

(c) weighted average (Round your average cost per unit to 2 decimal places.)

(d) specific identification.

Answer 1

	Closing Units = 1180 Units - 760 Units
	420	Units
A)	FIFO	25840
		(320*62 + 100*60)
B)	LIFO	22300
		(160*50 + 260 *55)
C)	Weighted Average	24,041
		(420*57.24)
	Calculation of average cost per unit
		=67540/1180
		57.24
		No.of Units	rate	Value
	Beginning inventory	160	50	8000
	Purchase	460	55	25300
	Purchase	240	60	14400
	Purchase	320	62	19840
	Totals	1,180		67540
d)	Special Identification	24280
		Units Purchases	Units sold	Remaining Unit	rate	value
	Mar-01	160	60	100	50	5,000
	Mar-05	460	420	40	55	2,200
	Mar-08	240	100	140	60	8,400
	Mar-25	320	180	140	62	8,680
		Total		420		24,280