Question

The following purchases and sales for Sipple Company are for November 2020. There was no inventory on November 1.

Nov. 2	Purchased 6,000 units at $32 each
Nov. 6	Sold 1,400 units at $40 each
Nov. 10	Purchased 1,700 units at $35 each
Nov. 12	Sold 1,300 units at $41 each
Nov. 22	Purchased 2,100 units at $36 each
Nov. 25	Sold 2,300 units at $42 each
Nov. 29	Purchased 2,000 at $37 each

Required:

A. Compute the ending inventory as of November 30, 2020, using the perpetual inventory procedure, under each of the following methods: (1) FIFO, (2) LIFO, and (3) Weighted Average (please carry unit costs to four decimal places, and round the total cost to the nearest dollar).

B. Repeat Part A using the periodic inventory procedure.

Starting:

		Purchased			Sold			Balance
			Unit	Total		Unit	Total		Unit	Total
	Date	Units	Cost	Cost	Units	Cost	Cost	Units	Cost	Cost
	Nov. 2

Answer 1

1) Ending inventory as of November 30, 2020, using the perpetual inventory procedure

FIFO	Cost of Goods Available for sale	Goods Sold	Ending Inventory
Particulars	Units	Cost P. U.	Amount $	Units	SV P. U.	Amount $	Units	Cost P. U.	Amount $
Opening Inventory	-	-	-	-	-	-	-	-	-
2-Nov	6,000	32	192,000			-	6,000	32.0000	192,000
6-Nov			-	1,400	40	56,000	4,600	32.0000	147,200
10-Nov	1,700	35	59,500			-	6,300	32.8095	206,700
12-Nov			-	1,300	41	53,300	5,000	33.0200	165,100
22-Nov	2,100	36	75,600			-	7,100	33.9014	240,700
22-Nov			-	2,300	42	96,600	4,800	34.8125	167,100
29-Mar	2,000	37	74,000			-	6,800	35.4559	241,100
	11,800		401,100	5,000		205,900
Ending Inventory Valuation = 1000 units*32 + 59,500 +75,600+ 74,000 = $ 241,100

LIFO	Cost of Goods Available for sale	Goods Sold	Ending Inventory
Particulars	Units	Cost P. U.	Amount $	Units	SV P. U.	Amount $	Units	Cost P. U.	Amount $
Opening Inventory	-	-	-	-	-	-	-	-	-
2-Nov	6,000	32	192,000			-	6,000	32.0000	192,000
6-Nov			-	1,400	40	56,000	4,600	32.0000	147,200
10-Nov	1,700	35	59,500			-	6,300	32.8095	206,700
12-Nov			-	1,300	41	53,300	5,000	32.2400	161,200
22-Nov	2,100	36	75,600			-	7,100	33.3521	236,800
22-Nov			-	2,300	42	96,600	4,800	32.1250	154,200
29-Mar	2,000	37	74,000			-	6,800	33.5588	228,200
	11,800		401,100	5,000		205,900
Ending Inventory Valuation = 4600 units*32 + 200 Units*35+ 74,000 = $ 228,200

Weighted Avg	Cost of Goods Available for sale	Goods Sold	Ending Inventory
Particulars	Units	Cost P. U.	Amount $	Units	SV P. U.	Amount $	Units	Cost P. U.	Amount $
Opening Inventory	-	-	-	-	-	-	-	-	-
2-Nov	6,000	32	192,000			-	6,000	32.0000	192,000
6-Nov			-	1,400	40	56,000	4,600	32.0000	147,200
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