Use the following information to calculate the ending inventory cost on December 31 and the cost...

Use the following information to calculate the ending inventory cost on December 31 and the cost of goods sold for December under each of three methods: (a) FIFO, (b) LIFO, and (c) Weighted Average.

Assume the periodic inventory system is used. (Show your work.)

Dec. 1 Beginning inventory 1,000 units @ $7

Dec. 5 Purchased 3,000 units @ $7.10

Dec. 18 Purchased 4,000 units @ $7.15

Dec. 24 Purchased 2,000 units @ $7.20

Dec. 31 Ending inventory 2,500 units

Solutions

Expert Solution

	Unit	Unit Cost	Total Cost
Beginning inventory	1000	7	7000
Purchase dec 5	3000	7.10	21300
Purchase dec 18	4000	7.15	28600
Purchase Dec 24	2000	7.20	14400
Total	10000		71300

Calculate ending inventory

FIFO = 2000*7.2+500*7.15 = $17975

LIFO = 1000*7+1500*7.10 = $17650

Weighted average = 71300/10000*2500 = $17825

ekkarill92 answered 1 year ago

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