Below is the information relating to Montel purchases of snowboards during september ,during the same month 120 snoeboards were sold .Montel uses periodic inventory system.
Compute the ending Inventory under FIFO and LIFO method and Cost of Goods sold.
What you notice about in the both method regarding Cost of Goods sold and ending inventory
|Cost of Goods available for sale||$13,965|
|Ending Inventory (FIFO)|
|Cost of Goods Sold =Cost of Goods available for sale-Ending Inventory||$12,390|
|Ending Inventory (LIFO)|
|Cost of Goods Sold =Cost of Goods available for sale-Ending Inventory||$12,465|
|when the price is increasing trend cost of goods sold is lower and ending inventory is higher in FIFO compared to LIFO|
|Cost of Goods Sold =Cost of Goods available for sale-Ending Inventory- $12,390|