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Warnerwoods Company uses a perpetual 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      80   units   @ $50.60 per unit              
    Mar.   5      Purchase      215   units   @ $55.60 per unit              
    Mar.   9      Sales                  240   units   @ $85.60 per unit
    Mar.   18      Purchase      75   units   @ $60.60 per unit              
    Mar.   25      Purchase      130   units   @ $62.60 per unit              
    Mar.   29      Sales                  110   units   @ $95.60 per unit
             Totals      500   units         350   units     

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 55 units from beginning inventory and 185 units from the March 5 purchase; the March 29 sale consisted of 35 units from the March 18 purchase and 75 units from the March 25 purchase.

Answer 1

d.Computation of cost of Ending inventory and cost of goods sold using specific identification method is as follows:

Date	Number of Units Purchased	Cost per Unit	Purchase Cost	Number of Units Sold	Cost per Unit	Cost of Goods Sold	Number of Units Balance	Cost per Unit	Inventory Balance
Mar.1							80	$   50.60	$            4,048
Mar. 5	215	$   55.60	$ 11,954				80	$   50.60	$            4,048
							215	$   55.60	$         11,954
Mar. 9				55	$   50.60	$         2,783
				185	$   55.60	$       10,286	25	$   50.60	$            1,265
							30	$   55.60	$            1,668
Mar. 18	75	$   60.60	$     4,545				25	$   50.60	$            1,265
							30	$   55.60	$            1,668
							75	$   60.60	$            4,545
Mar. 25	130	$   62.60	$     8,138				25	$   50.60	$            1,265
							30	$   55.60	$            1,668
							75	$   60.60	$            4,545
							130	$   62.60	$            8,138
Mar. 29				35	$   60.60	$         2,121
				75	$   62.60	$         4,695	25	$   50.60	$            1,265
							30	$   55.60	$            1,668
							40	$   60.60	$            2,424
							55	$   62.60	$            3,443
Total	420		$ 24,637	350		$      19,885	150		$           8,800

From above working, Cost of ending inventory is $ 8,800