Question
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FIFO and LIFO costs under perpetual inventory system The following units of an item were available...
FIFO and LIFO costs under perpetual inventory system
The following units of an item were available for sale during the year:
| Beginning inventory | 8,000 | units at $170 |
| Sale | 4,800 | units at $300 |
| First purchase | 15,200 | units at $173 |
| Sale | 13,100 | units at $300 |
| Second purchase | 16,200 | units at $181 |
| Sale | 14,100 | units at $300 |
The firm uses the perpetual inventory system, and there are 7,400 units of the item on hand at the end of the year.
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Open spreadsheet
| FIFO and LIFO costs under perpetual inventory system | |||
| The following units of an item were available for sale during the year: | |||
| Quantity | Price | ||
| Beginning inventory | 8,000 | $170 | |
| Sale | 4,800 | $300 | |
| First purchase | 15,200 | $173 | |
| Sale | 13,100 | $300 | |
| Second purchase | 16,200 | $181 | |
| Sale | 14,100 | $300 | |
| Ending inventory | 7,400 | ||
| Using formulas and cell references, perform the required analysis, and input your answers into the Inventory Cost column. Transfer the numeric results for the green entry cells (B16:B17) into the appropriate fields in CNOWv2 for grading. | |||
| Inventory Cost | Formulas | ||
| FIFO method | |||
| LIFO method | |||
-
What is the total cost of the ending inventory according to FIFO? Round your answer to the nearest dollar.
$
-
What is the total cost of the ending inventory according to LIFO? Round your answer to the nearest dollar.
$
Solutions
Expert Solution
| FIFO METHOD | PURHASES | COST OF GOODS SOLD | CLOSING BALANCE | |||||||
| Date | Particulars | Units (A) | Rate | Total Cost | Units (A) | Rate | Total Cost | Units (A) | Rate | Total Cost |
| --------- | Beginning inventory | 8000 | $ 170 | $1,360,000 | ||||||
| --------- | Sales | 4800 | $ 170 | $ 816,000 | 3200 | $ 170 | $ 544,000 | |||
| --------- | First Purchase | 15200 | $ 173 | $ 2,629,600 | 3200 | $ 170 | $ 544,000 | |||
| 15200 | $ 173 | $2,629,600 | ||||||||
| --------- | Sales | 3200 | $ 170 | $ 544,000 | ||||||
| 9900 | $ 173 | $ 1,712,700 | 5300 | $ 173 | $ 916,900 | |||||
| --------- | Second Purchase | 16200 | $ 181 | $ 2,932,200 | 5300 | $ 173 | $ 916,900 | |||
| 16200 | $ 181 | $2,932,200 | ||||||||
| --------- | Sales | 5300 | $ 173 | $ 916,900 | ||||||
| 8800 | $ 181 | $ 1,592,800 | 7400 | $ 181 | $1,339,400 | |||||
| Total | 31400 | $5,561,800 | 27200 | $5,582,400 | 7400 | $1,339,400 | ||||
| LIFO METHOD | PURHASES | COST OF GOODS SOLD | CLOSING BALANCE | |||||||
| Date | Particulars | Units (A) | Rate | Total Cost | Units (A) | Rate | Total Cost | Units (A) | Rate | Total Cost |
| --------- | Beginning inventory | 8000 | $ 170 | $1,360,000 | ||||||
| --------- | Sales | 4800 | $ 170 | $ 816,000 | 3200 | $ 170 | $ 544,000 | |||
| --------- | First Purchase | 15200 | $ 173 | $ 2,629,600 | 3200 | $ 170 | $ 544,000 | |||
| 15200 | $ 173 | $2,629,600 | ||||||||
| --------- | Sales | 13100 | $ 173 | $ 2,266,300 | 3200 | $ 170 | $ 544,000 | |||
| 2100 | $ 173 | $ 363,300 | ||||||||
| --------- | Second Purchase | 16200 | $ 181 | $ 2,932,200 | 3200 | $ 170 | $ 544,000 | |||
| 2100 | $ 173 | $ 363,300 | ||||||||
| 16200 | $ 181 | $2,932,200 | ||||||||
| --------- | Sales | 14100 | $ 181 | $ 2,552,100 | 3200 | $ 170 | $ 544,000 | |||
| 2100 | $ 173 | $ 363,300 | ||||||||
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