Question

Exercise 8-10
Inventory information for Part 311 of Cheyenne Corp. discloses the following information for the month
of June.

June 1 Balance 302 units @ $11

June 10 Sold 198 units @ $27

June 11 Purchased 803 units @ $13

June 15 Sold 498 units @ $28

June 20 Purchased 498 units @ $14

June 27 Sold 296 units @ $30

Assuming that the periodic inventory method is used, compute the cost of goods sold and ending
inventory under (1) LIFO and (2) FIFO.
(1) (2)
LIFO FIFO
Calculate Cost of Goods Sold under lifo and fifo
Calculate Ending Inventory under life and fifo

Assuming that the perpetual inventory method is used and costs are computed at the time of each
withdrawal, what is the value of the ending inventory at LIFO?

The ending inventory at LIFO $

Assuming that the perpetual inventory method is used and costs are computed at the time of each
withdrawal, what is the gross profit if the inventory is valued at FIFO?

Gross Profit (FIFO)
$

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Bal. June1	302	11	3322				302	11	3322
Purchasse
11-Jun	803	13	10439	494	13	6422	309	13	4017
20-Jun	498	14	6972	498	14	6972
TOTAL	1603		20733	992		13394	611		7339
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Bal. June1	302	11	3322	302	11	3322
Purchasse
11-Jun	803	13	10439	690	13	10439	113	13	1469
20-Jun	498	14	6972				498	14	6972
TOTAL	1603		20733	992		13761	611		8441
			LIFO	FIFO
Cost of Goods sold			13394	13761
Cost of Ending Inventory			7339	8441
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jun							302	11	3322
10-Jun				198	11	2178	104	11	1144
11-Jun	803	13	10439				104	11	1144
							803	13	10439
15-Jun				498	13	6474	104	11	1144
							305	13	3965
20-Jun	498	14	6972				104	11	1144
							305	13	3965
							498	14	6972
27-Jun				296	14	4144	104	11	1144
							305	13	3965
							202	14	2828
TOTAL	1301		17411	992		12796	611		7937
Ending Inventory uunder Perpetual LIFO				7937
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jun							302	11	3322
10-Jun				198	11	2178	104	11	1144
11-Jun	803	13	10439				104	11	1144
							803	13	10439
15-Jun				104	11	1144
				394	13	5122	409	13	5317
20-Jun	498	14	6972				409	13	5317
							498	14	6972
27-Jun				296	13	3848	113	13	1469
							498	14	6972
TOTAL	1301		17411	992		12292	611		8441
Gross Profit
Sales	(198*27+498*28+296*30)			28170
Less: COGS				12292
Gross profit				15878