Question

Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2018 is available:

Aug. 1 Inventory on hand - 10,500 units; cost $8.80 each

8 Purchased 30,000 units for $7.50 each

14 Sold 21,000 units for $14.00 each

18 Purchased 16,000 units for $7.00 each

25 Sold 20,000 units for $13.00 each

31 Inventory on hand - 15,500 units

Required: Determine the inventory balance Altira would report in it's August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using FIFO, LIFO, and the Average Cost method:

FIFO	COG Available for Sale			COG Sold - Periodic FIFO			Ending Inventory - Periodic FIFO
	# of units	Cost per unit	COG Available for Sale	# of units sold	Cost per unit	COG Sold	# of units in ending inventory	Cost per unit	Ending inventory
Beginning Inventory	10,500	$8.80	$92,400	10,500	$8.80	$92,400	0	$8.80	0
Purchases:
Aug 8	30,000	$7.50	$225,000	30,000	$7.50	$225,000	0	$7.50	0
Aug 18	16,000	$7.00	$112,000	?	$7.00	?	?	$7.00	?
Total	56,500		$429,400			?	?		?

LIFO	COG Available for Sale			COG Sold - Periodic LIFO			Ending Inventory - Periodic LIFO
	# of units	Cost per unit	COG Available for Sale	# of units sold	Cost per unit	COG Sold	# of units in ending inventory	Cost per unit	Ending inventory
Beginning Inventory	10,500	$8.80	$92,400	0	$8.80	$0	10,500	$8.80	$92,400
Purchases:
Aug 8	30,000	$7.50	$225,000	?	$7.50	?	?	$7.50	?
Aug 18	16,000	$7.00	$112,000	16,000	$7.00	$112,000	0	$7.00	0
Total	56,500		$429,400	?		?	?		?

Average Cost	COG Available for Sale			COG Sold - Average Cost			Ending Inventory - Average Cost
	# of units	Cost per unit	COG Available for Sale	# of units sold	Cost per unit	COG Sold	# of units in ending inventory	Cost per unit	Ending inventory
Beginning Inventory	10,500	$8.80	$92,400
Purchases:
Aug 8	30,000	$7.50	$225,000
Aug 18	16,000	$7.00	$112,000
Total	56,500		$429,400	41,000	?	?	15,500	?	?

Answer 1

Ans.
	Available for sale:
	Date	Transactions	Units	Rate	Total
	1-Aug	Beginning inventory	10,500	$8.80	$92,400
	8-Aug	Purchases	30,000	$7.50	$225,000
	18-Aug	Purchases	16,000	$7.00	$112,000
	Total available for sale		56,500		$429,400
	Ending inventory units   =	15,500 units
1	FIFO:
	Date	Units	Rate	Total
	18-Aug	15,500	$7.00	$108,500
	Cost of ending inventory	15,500		$108,500
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
	Cost of goods sold =   Cost of goods available for sale - Cost of ending inventory
		$429,000 - $108,500
		$320,500
2	LIFO:
	Date	Units	Rate	Total
	1-Aug	10,500	$8.80	$92,400
	8-Aug	5,000	$7.50	$37,500
	Cost of ending inventory	15500		$129,900
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.
	Cost of goods sold =   Cost of goods available for sale - Cost of ending inventory
		$429,000 - $129,900
		$299,100
3	Average cost :
	Weighted- average cost per unit = Total cost of goods available for sale / Total units available for sale
		$429,000 / 56,500
		$7.59
	Cost of ending inventory   =   No. of units in ending inventory * Average cost per unit
		15,500 * $7.59
		$117,645
	Cost of goods sold =   Cost of goods available for sale - Cost of ending inventory
		$429,000 - $117,645
		$311,355