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.

$_____________FIFO

$_____________LIFO

(C) $_____________Weigthted Average

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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