Question

Date	Transaction	Units In	Unit Cost	Total	Units Sold	Sales Price	Total
7/1	Balance	100	4.10	410
7/6	Purchase	800	4.20	3,360
7/7	Sale				300	7.00	2,100
7/10	Sale				300	7.30	2,190
7/12	Purchase	400	4.50	1,800
7/15	Sale				200	7.40	1,480
7/18	Purchase	300	4.60	1,380
7/22	Sale				400	7.40	2,960
7/25	Purchase	500	4.58	2,290
7/30	Sale				200	7.50	1,500
	Totals	2,100		9,240	1,400		10,230

Compute FIFO, LIFO, Average for the periodic inventory system. Be sure to do a summary table and a partial income statement through gross profit for the inventory valuation method and inventory system.

Answer 1

• All working forms part of the answer
• Amounts are in $
• Periodic method is followed
• FIFO

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	100	4.1	410	100	4.1	410	0	4.1	0
Purchases:
06-Jul	800	4.2	3360	800	4.2	3360	0	4.2	0
12-Jul	400	4.5	1800	400	4.5	1800	0	4.5	0
18-Jul	300	4.6	1380	100	4.6	460	200	4.6	920
25-Jul	500	4.58	2290		4.58	0	500	4.58	2290
TOTAL	2100		9240	1400		6030	700		3210

Income Statement

Sales	Units	Rate	Amount
Jul-07	300	7	2100
Jul-10	300	7.3	2190
Jul-15	200	7.4	1480
Jul-22	400	7.4	2960
Jul-30	200	7.5	1500
Total	1400		$10230
(-) CoGS	1400		6030
Gross Profit			$4200

• LIFO

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	100	4.1	410	0	4.1	0	100	4.1	410
Purchases:
06-Jul	800	4.2	3360	200	4.2	840	600	4.2	2520
12-Jul	400	4.5	1800	400	4.5	1800	0	4.5	0
18-Jul	300	4.6	1380	300	4.6	1380	0	4.6	0
25-Jul	500	4.58	2290	500	4.58	2290	0	4.58	0
TOTAL	2100		9240	1400		6310	700		2930

Income Statement

Sales	Units	Rate	Amount
Jul-07	300	7	2100
Jul-10	300	7.3	2190
Jul-15	200	7.4	1480
Jul-22	400	7.4	2960
Jul-30	200	7.5	1500
Total	1400		$10230
(-) CoGS	1400		6310
Gross Profit			$3920

• Weighted Average Profits

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	100	4.1	410
Purchases:
06-Jul	800	4.2	3360
12-Jul	400	4.5	1800
18-Jul	300	4.6	1380
25-Jul	500	4.58	2290
TOTAL	2100	$4.4 [9240/2100]	$9240	1400	4.4	$6160	700	4.4	$3080

Income Statement

Sales	Units	Rate	Amount
Jul-07	300	7	2100
Jul-10	300	7.3	2190
Jul-15	200	7.4	1480
Jul-22	400	7.4	2960
Jul-30	200	7.5	1500
Total	1400		$10230
(-) CoGS	1400		$6160
Gross Profit			$4070