Question

Inventory by Three Methods

The units of an item available for sale during the year were as follows:

Jan.1	Inventory	7 units @ $24 per unit
Feb. 17	Purchase	19 units @ $25 per unit
Jul. 21	Purchase	19 units @ $28 per unit
Nov. 23	Purchase	9 units @ $29 per unit

There are 16 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost under each of the following methods.

a. Determine the inventory cost by the first-in, first-out method.
$

b. Determine the inventory cost by the last-in, first-out method.
$

c. Determine the inventory cost by the average cost method. When computing your answer, round the average cost per unit to the nearest whole dollar.
$

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	7	24	168	7	24	168
Purchasse
17-Feb	19	25	475	19	25	475
21-Jul	19	28	532	12	28	336	7	28	196
23-Nov	9	29	261				9	29	261
TOTAL	54		1436	38		979	16		457
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	7	24	168				7	24	168
Purchasse
17-Feb	19	25	475	10	25	250	9	25	225
21-Jul	19	28	532	19	28	532
23-Nov	9	29	261	9	29	261
TOTAL	54		1436	38		1043	16		393
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	7	24	168
Purchasse
17-Feb	19	25	475
21-Jul	19	28	532
23-Nov	9	29	261
TOTAL	54	26.59	1436	38	26.59	1010	16	26.59	426
			FIFO	LIFO	Average
Ending inventory			457	393	426