Question

Beginning inventory, purchases, and sales data for hammers are as follows:

Mar. 3rd inventory 12 units @ $15

11 purchase 13 units @ $17

14 sale 18 units

21 purchase 9 units @ $20

25 sale. 10 units

assuming the business maintains a perpetual inventory system, complete the inventory cards and calculate the cost of goods Sold and ending inventory under the following assumptions

a. First–in, first-out

Balances

costs of goods sold $

ending inventory $

b. Last-in, first-out

Balances

cost of goods sold $

ending inventory $

Answer 1

a.

Particulars	No. of Units	Cost per unit	Total Value
Beginning Inventory	12	$15	$180
march 11 Purchase (20-10 units)	13	$17	$221
march 21 Purchase (18+10-12-13 units)	3	$20	60
Cost of goods sold_ FIFO method	$461

Particulars	No. of Units	Cost per unit	Total Value
march 21 Purchase (9-3 units)	6	$20	120
Ending inventory_ FIFO method	$120

b.

Particulars	No. of Units	Cost per unit	Total Value
Beginning Inventory (18-13 units)	5	$15	$75
march 11 Purchase (20-10 units)	13	$17	$221
march 21 Purchase	9	$20	180
Beginning Inventory (10-9 units)	1	$15	15
Cost of goods sold_ LIFO method	$491

Particulars	No. of Units	Cost per unit	Total Value
Beginning Inventory (12-5-1 units)	6	$15	90
Ending inventory_ LIFO method	$90