Question

Periodic Inventory by Three Methods

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

Jan. 1	Inventory	19 units at $29
Feb. 17	Purchase	9 units at $30
Jul. 21	Purchase	17 units at $31
Nov. 23	Purchase	10 units at $33

There are 11 units of the item in the physical inventory at December 31. The periodic inventory system is used. Round average unit cost to the nearest cent and final answers to the nearest whole dollar, if required.

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 weighted average cost method.
$

Answer 1

• [a] Ending inventory cost = $ 361

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	19	$                29.00	$                            551.00	19	$               29.00	$                     551.00	0	$                 29.00	$                         -
Purchases:
17-Feb	9	$                30.00	$                            270.00	9	$               30.00	$                     270.00	0	$                 30.00	$                         -
21-Jul	17	$                31.00	$                            527.00	16	$               31.00	$                     496.00	1	$                 31.00	$                  31.00
23-Nov	10	$                33.00	$                           330.00	0	$               33.00	$                              -	10	$                 33.00	$                330.00
TOTAL	55		$                        1,678.00	44		$                 1,317.00	11		$                361.00

• [b] Ending inventory cost = $ 319

LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	19	$                29.00	$                            551.00	8	$               29.00	$                     232.00	11	$                 29.00	$                319.00
Purchases:
17-Feb	9	$                30.00	$                            270.00	9	$               30.00	$                     270.00	0	$                 30.00	$                         -
21-Jul	17	$                31.00	$                            527.00	17	$               31.00	$                     527.00	0	$                 31.00	$                         -
23-Nov	10	$                33.00	$                            330.00	10	$               33.00	$                     330.00	0	$                 33.00	$                         -
TOTAL	55		$                        1,678.00	44		$                 1,359.00	11		$                319.00

• [c] Ending inventory cost = $ 336

Average Method	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	19	$                29.00	$                            551.00
Purchases:
17-Feb	9	$                30.00	$                            270.00
21-Jul	17	$                31.00	$                            527.00
23-Nov	10	$                33.00	$                            330.00
TOTAL	55	$            30.5091	$                        1,678.00	44	$          30.5100	$                 1,342.44	11	$            30.5100	$                335.61