Question

Assume that a retailer’s beginning inventory and purchases of a popular item during January included (1) 310 units at $7.10 in beginning inventory on January 1, (2) 460 units at $8.10 purchased on January 8, and (3) 760 units at $9.10 purchased on January 29. The company sold 360 units on January 12 and 560 units on January 30.

Required:

1. Calculate the cost of goods sold for the month of January under (a) FIFO (periodic calculation), (b) FIFO (perpetual calculation), (c) LIFO (periodic calculation), and (d) LIFO (perpetual calculation).

Answer 1

FIFO METHDO - PERIODICAL
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	CLOSING STOCK
Date	Particulars	Units	Cost Per unit	Total	Units	Cost Per unit	Cost of Goods Sold	Units	Cost Per unit	Ending inventory
Jan.01	Beginning Inventory	310	$                7.10	$                  2,201	310	$           7.10	$             2,201
Jan.08	Purchases	460	$                8.01	$                  3,685	460	$           8.01	$             3,685
Jan.29	Purchases	760	$                9.10	$                  6,916	150	$           9.10	$             1,365	610	$           9.10	$             5,551
	Total Goods Available For sale	1,530		$               12,802	920		$             7,251	610		$             5,551
FIFO METHDO - PERPETUAL
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	CLOSING STOCK
Date	Particulars	Units	Cost Per unit	Total	Units	Cost Per unit	Cost of Goods Sold	Units	Cost Per unit	Ending inventory
Jan.01	Beginning Inventory							310	$           7.10	$             2,201
Jan.08	Purchases	460	$                8.01	$                  3,685				310	$           7.10	$             2,201
								460	$           8.01	$             3,685
Jan.12	Sales				310	$           7.10	$             2,201
					50	$           8.01	$                 401	410	$           8.01	$             3,284
Jan.29	Purchases	760	$                9.10	$                  6,916				410	$           8.01	$             3,284
								760	$           9.10	$             6,916
Jan.30	Sales				410	$           8.01	$             3,284
					150	$           9.10	$             1,365	610	$           9.10	$             5,551
		1,220		$               10,601	920		$             7,251	610		$             5,551
LIFO METHDO - PERIODICAL
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	CLOSING STOCK
Date	Particulars	Units	Cost Per unit	Total	Units	Cost Per unit	Cost of Goods Sold	Units	Cost Per unit	Ending inventory
Jan.01	Beginning Inventory	310	$                7.10	$                  2,201				310	$           7.10	$             2,201
Jan.08	Purchases	460	$                8.01	$                  3,685	160	$           8.01	$             1,282	300	$           8.01	$             2,403
Jan.29	Purchases	760	$                9.10	$                  6,916	760	$           9.10	$             6,916
	Total Goods Available For sale	1,530		$               12,802	920		$             8,198	610		$             4,604
LIFO METHDO - PERPETUAL
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	CLOSING STOCK
Date	Particulars	Units	Cost Per unit	Total	Units	Cost Per unit	Cost of Goods Sold	Units	Cost Per unit	Ending inventory
Jan.01	Beginning Inventory							310	$           7.10	$             2,201
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