Question

Marigold Corporation began operations on December 1, 2016. The only inventory transaction in 2016 was the purchase of inventory on December 10, 2016, at a cost of $20 per unit. None of this inventory was sold in 2016. Relevant information for fiscal 2017 is as follows: Ending inventory units: December 31, 2016 120 December 31, 2017, by purchase date —Dec. 2, 2017 120 —July 20, 2017 31 151 During 2017, the following purchases and sales were made: Purchases Sales Mar. 15 350 units at $26 Apr. 10 220 July 20 350 units at $28 Aug. 20 310 Sept. 4 260 units at $30 Nov. 18 180 Dec. 2 120 units at $30 Dec. 12 339 The company uses the periodic inventory method. Determine ending inventory under (1) specific identification, (2) FIFO, (3) LIFO, and (4) average-cost.

Answer 1

1. Specific Identification method

Specific Identification	Units	Rate	Amount
Balance from Dec 2 purchase	120	$ 30	$ 3,600
Balance from July 20 purchase	31	$ 28	$      868
Ending inventory	151		$ 4,468

FIFO Method

FIFO Method	Units	Rate	Amount
Balance from Sep 4 purchase	31	$ 30	$      930
Balance from Dec 2 purchase	120	$ 30	$ 3,600
Ending inventory	151		$ 4,530

LIFO Method

LIFO Method	Units	Rate	Amount
Balance from Mar 15 purchase	31	$ 26	$      806
Balance from beginning inventory	120	$ 20	$ 2,400
Ending inventory	151		$ 3,206

Weighted average method

	Units	rate	Amount
Beginning inventory	120	$ 20	$    2,400
March 15	350	$ 26	$    9,100
July 20	350	$ 28	$    9,800
Sep 4	260	$ 30	$    7,800
Dec 2	120	$ 30	$    3,600
Goods available for sale	1200		$ 32,700

Weighted average cost per unit = value of goods available for sale / Total units available

Weighted average cost per unit = $32,700/1,200

Weighted average cost per unit = $27.25

Ending inventory = 151*$27.25

Ending inventory = $4,114.75

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