Question

In: Accounting

The beginning inventory and purchases of Commodity A for the period were as follows: Beginning inventory...

The beginning inventory and purchases of Commodity A for the period were as follows:

Beginning inventory 24 units @ $10 each

First purchase 32 units @ $11 each

Second purchase 20 units @ $13 each

Third purchase 20 units @ $15 each

The company uses the periodic system and there were 25 units of Commodity A in the inventory at the end of the period.

REQUIRED:  Determine the cost of the 25 units in the inventory by each of the following methods: Show all supporting calculations or no credit.

  1. $_____________FIFO
  1. $_____________LIFO

(C) $_____________Weigthted Average

Solutions

Expert Solution

Solution

FIFO LIFO Weighted Average
Ending Inventory $              365 $                       251 $                 300

Working

Units Cost per unit value
Beginning Balance 24 $                   10.00 $ 240
Purchases
32 $                   11.00 $ 352
20 $                   13.00 $ 260
20 $                   15.00 $ 300
Cost of goods available for sale 96 $ 1,152

.

Average Cost of Inventory
Units (A) 96
Total Cost (B) $ 1,152
Average Cost (C=B/A) $ 12.000

.

FIFO
Total Units Available for sale 96
Units Sold 71
Closing Stock in Units 25
Valuation
Ending Inventory 20 @ $             15.00 $ 300
5 @ $             13.00 $ 65
Value Of Ending Inventory $ 365

.

LIFO
Total Units Available for sale 96
Units Sold 71
Closing Stock in Units 25
Valuation
Ending Inventory 24 @ $             10.00 $ 240
1 @ $             11.00 $ 11
Value Of Ending Inventory $                  251

.

Weighted Average method
Total Units Available for sale 96
Units Sold 71
Closing Stock in Units 25
Valuation
Ending Inventory 25 @ $           12.000 $                  300

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