Question

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

1. What is the total cost of the ending inventory according to FIFO? Round your answer to the nearest dollar.

   $  

2. What is the total cost of the ending inventory according to LIFO? Round your answer to the nearest dollar.

   $  

Answer 1

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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