Question

Marvin Company has a beginning inventory of 14 sets of paints at a cost of $1.80 each. During the year, the store purchased 6 sets at $1.90, 8 sets at $2.50, 8 sets at $2.80, and 12 sets at $3.30. By the end of the year, 32 sets were sold. a. Calculate the number of paint sets in ending inventory. Number of paint sets b. Calculate the cost of ending inventory under LIFO, FIFO, and the weighted average methods. (Round your answers to the nearest cent.) Cost of ending inventory under LIFO $ Cost of ending inventory under FIFO $ Cost of ending inventory under Weighted Average

Answer 1

	Given that-
				Qty	Rate	Value
	Beginning inventory			14	1.8	25.2
	Purchases during the year
	1			6	1.9	11.4
	2			8	2.5	20
	3			8	2.8	22.4
	4			12	3.3	39.6
	Total purchases			34		93.4
	Sold			32
Answer a)	Calculate the number of paint sets in ending inventory
	Ending inventory = Beginning + purchases - sold
			=14+34-32		16
Answer b)
	Calculate the cost of ending inventory under
	i) LIFO
	Under LIFO ending inventory based on intial price
	Value of ending inventory =
				Qty	Rate	Value
				14	1.8	25.2
				2	1.9	3.8
				16		29
	ii) FIFO
	Under FIFO ending inventory based on last purchase price
	Value of ending inventory =
				Qty	Rate	Value
				12	3.3	39.6
				4	2.8	11.2
				16		50.8
	iii) weighted average price
		Weighted average cost
					Qty		Value
		Beginning inventory			14		25.2
		Total purchases			34		93.4
					48		118.6
		Rate =118.6/48			2.47
		Ending inventory value =16*2.47				39.53