Question

Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	13	units at $35	$455
Aug. 7	Purchase	20	units at $37	740
Dec. 11	Purchase	14	units at $38	532
		47	units	$1,727

There are 18 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method (round per unit cost to two decimal places and your final answer to the nearest whole dollar).

a.	First-in, first-out (FIFO)	$
b.	Last-in, first-out (LIFO)	$
c.	Weighted average cost

Answer 1

Solution a:

Computation of COGS and ending inventory - Periodic FIFO
Particulars	Cost of goods available for sale	Cost of goods sold	Ending Inventory
Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	13	$35.00	$455	13	$35.00	$455.00	0	$35.00	$0.00
Purchases:
7-Aug	20	$37.00	$740	16	$37.00	$592.00	4	$37.00	$148.00
11-Dec	14	$38.00	$532	0	$38.00	$0.00	14	$38.00	$532.00
Total	47		$1,727	29		$1,047.00	18		$680.00

Ending inventory under FIFO = $680

Solution b:

Computation of COGS and ending inventory - Periodic LIFO
Particulars	Cost of goods available for sale	Cost of goods sold	Ending Inventory
Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	13	$35.00	$455	0	$35.00	$0.00	13	$35.00	$455.00
Purchases:
7-Aug	20	$37.00	$740	15	$37.00	$555.00	5	$37.00	$185.00
11-Dec	14	$38.00	$532	14	$38.00	$532.00	0	$38.00	$0.00
Total	47		$1,727	29		$1,087.00	18		$640.00

Ending inventory under FIFO = $640

Solution c:

Computation of COGS and ending inventory - Average cost
Particulars	Cost of goods available for sale	Cost of goods sold - Average cost	Ending Inventory - Average cost
Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	13	$35.00	$455
Purchases:
7-Aug	20	$37.00	$740
11-Dec	14	$38.00	$532
Total	47	$36.74	$1,727.0	29	$36.74	$1,066	18	$36.74	$661

Ending inventory using average cost = $661