Question

Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows:

Jan. 1 Inventory 1,060 units @ $128

Feb. 17 Purchase 1,440 units @ $129

Jul. 21 Purchase 1,575 units @ $130

Nov. 23 Purchase 1,150 units @ $131

There are 1,225 units of the item in the physical inventory at December 31. The periodic inventory system is used. Do not round intermediate calculation and round final answer to nearest whole value.

a. Determine the inventory cost by the first-in, first-out method. $

b. Determine the inventory cost by the last-in, first-out method. $

c. Determine the inventory cost by the weighted average cost method. $

Answer 1

Ans. A	Ending Inventory Units = 1,225 units
	Periodic FIFO:
	Date	Units	Rate	Total
	23-Nov	1150	$131.00	$150,650
	21-Jul	75	$130.00	$9,750
	Ending Inventory	1225		$160,400
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. B	Periodic LIFO:
	Date	Units	Rate	Total
	1-Jan	1060	$128.00	$135,680
	17-Feb	165	$129.00	$21,285
	Ending Inventory	1225		$156,965
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.
Ans. C	Weighted average Periodic:
	Date	Units	Rate	Total
	1-Jan	1060	$128.00	$135,680
	17-Feb	1440	$129.00	$185,760
	21-Jul	1575	$130.00	$204,750
	23-Nov	1150	$131.00	$150,650
	Cost of goods available for sale	5225		$676,840
	Cost of Ending Inventory = Ending inventory units * Total cost available / Total units available
	1,225 * $676,840 / 5,225
	$158,685