Question

Alternative Inventory Methods

Frate Company was formed on December 1, 2015, and uses the periodic inventory system. The following information is available from Frate's inventory records for Product Ply:

	Units			Unit Cost
January 1, 2016 (beginning inventory)	2,900			$5.00
Purchases:
January 6, 2016	3,600			6.00
January 25, 2016	3,300			6.50
February 17, 2016	2,700			7.00
March 27, 2016	3,000			7.50

A physical inventory on March 31, 2016 shows 5,800 units on hand.

Required:

For each method, enter your answers in chronological order.

Prepare schedules to compute the ending inventory at March 31, 2016, under each of the following inventory methods:
(For the weighted average method, round the average cost per unit to two decimal places.)
1. FIFO

FRATE COMPANY
Computation of Inventory for Product Ply Under FIFO Inventory Method
March 31, 2016
	Units	Unit cost	Total cost
		$	$
March 31, 2016 inventory			$

2. LIFO

FRATE COMPANY
Computation of Inventory for Product Ply Under LIFO Inventory Method
March 31, 2016
	Units	Unit cost	Total cost
		$	$
March 31, 2016 inventory			$

3. Weighted average

FRATE COMPANY
Computation of Inventory for Product Ply Under Weighted Average Inventory Method
March 31, 2016
	Units	Unit cost	Total cost
Beginning inventory		$	$
January 6, 2016
January 25, 2016
February 17, 2016
March 27, 2016
Total			$
Weighted average cost		$
March 31, 2016 inventory		$	$

Answer 1

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1. FIFO	Means ending inventory will be having units from latest purchases
		Units	Unit Cost	Total Cost
Mar 27 2016		3000	$          7.50	$       22,500
Feb 27, 2016		2700	$          7.00	$       18,900
Jan 25 2016	5800-3000-2700	100	$          6.50	$             650
	Mar 31 2016 Inventory			$       42,050
2. LIFO	Means ending inventory will be having units from oldest/first purchases
		Units	Unit Cost	Total Cost
Jan 1 2016		2900	$          5.00	$       14,500
Jan 6 2016	5800-2900	2900	$          6.00	$       17,400
	Mar 31 2016 Inventory			$       31,900
3. Weighted Average
		Units	Unit cost	Total cost
Beginning inventory		2900	$          5.00	$       14,500
January 6, 2016		3600	$          6.00	$       21,600
January 25, 2016		3300	$          6.50	$       21,450
February 17, 2016		2700	$          7.00	$       18,900
March 27, 2016		3000	$          7.50	$       22,500
Total		15500		$       98,950
Weighted average cost	98950/15500		$          6.38
March 31, 2016 inventory	5800*6.38			$       37,004