In: Accounting
Inventory cost flow methods; periodic system
Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2017 is available:
Aug.1 | Inventory on hand—6,500 units; cost $7.90 each. |
8 | Purchased 24,000 units for $6.9 each. |
14 | Sold 18,000 units for $13.4 each. |
18 | Purchased 13,000 units for $6.4 each. |
25 | Sold 17,000 units for $12.4 each. |
31 | Inventory on hand—8,500 units. |
Required:
Determine the inventory balance Altira would report in its August 31, 2017, balance sheet and the cost of goods sold it would report in its August 2017 income statement using each of the following cost flow methods:
FIFO | Cost of Goods Available for sale | Cost of Goods Available Sold | Ending Inventory – Periodic FIFO | ||||||
# of units | Cost per unit | Cost of goods available | # of units | Cost per unit | COGS | # of units in end inventory | Cost per unit | Ending inventory | |
Beginning Inventory | |||||||||
Purchases: | |||||||||
August 8 | |||||||||
August 18 | |||||||||
TOTAL |
LIFO | Cost of Goods Available for sale | Cost of Goods Available for sale Periodic LIFO | Ending Inventory – Periodic LIFO | ||||||
# of units | Cost per unit | Cost of goods available | # of units | Cost per unit | COGS | # of units in end inventory | Cost per unit | Ending inventory | |
Beginning Inventory | |||||||||
Purchases: | |||||||||
August 8 | |||||||||
August 18 | |||||||||
TOTAL |
Average Cost | Cost of Goods Available for sale | Cost of Goods Available for sale periodic FIFO | Ending Inventory – Periodic FIFO | ||||||
Beginning Inventory | |||||||||
Purchases: | |||||||||
January 8 | |||||||||
January 19 | |||||||||
Total |
FIFO | Cost of Goods Available for sale | Cost of goods sold | Ending Inventory – Periodic FIFO | ||||||
# of units | Cost per unit | Cost of goods available | # of units | Cost per unit | COGS | # of units in end inventory | Cost per unit | Ending inventory | |
Beginning Inventory | 6500 | $7.90 | $51,350.00 | 6500 | $7.90 | $51,350.00 | 0 | $7.90 | $0.00 |
Purchases: | |||||||||
August 8 | 24000 | $6.90 | $165,600.00 | 24000 | $6.90 | $165,600.00 | 0 | $6.90 | $0.00 |
August 18 | 13000 | $6.40 | $83,200.00 | 4500 | $6.40 | $28,800.00 | 8500 | $6.40 | $54,400.00 |
TOTAL | 43500 | $300,150.00 | 35000 | $245,750.00 | 8500 | $54,400.00 |
LIFO | Cost of Goods Available for sale | Cost of goods sold | Ending Inventory – Periodic LIFO | ||||||
# of units | Cost per unit | Cost of goods available | # of units | Cost per unit | COGS | # of units in end inventory | Cost per unit | Ending inventory | |
Beginning Inventory | 6500 | $7.90 | $51,350.00 | 0 | $7.90 | $0.00 | 6500 | $7.90 | $51,350.00 |
Purchases: | |||||||||
August 8 | 24000 | $6.90 | $165,600.00 | 22000 | $6.90 | $151,800.00 | 2000 | $6.90 | $13,800.00 |
August 18 | 13000 | $6.40 | $83,200.00 | 13000 | $6.40 | $83,200.00 | 0 | $6.40 | $0.00 |
TOTAL | 43500 | $300,150.00 | 35000 | $235,000.00 | 8500 | $65,150.00 |
Average Cost | Cost of Goods Available for sale | Cost of goods sold | Ending Inventory – Average Cost | ||||||
# of units | Cost per unit | Cost of goods available | # of units | Cost per unit | COGS | # of units in end inventory | Cost per unit | Ending inventory | |
Beginning Inventory | 6500 | $7.90 | $51,350.00 | ||||||
Purchases: | |||||||||
August 8 | 24000 | $6.90 | $165,600.00 | ||||||
August 18 | 13000 | $6.40 | $83,200.00 | ||||||
TOTAL | 43500 | $6.90 | $300,150.00 | 35000 | $6.90 | $241,500.00 | 8500 | $6.90 | $58,650.00 |