Question

Periodic Inventory by Three Methods

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

Jan. 1	Inventory	9 units @ $49
Feb. 17	Purchase	10 units @ $51
Jul. 21	Purchase	19 units @ $54
Nov. 23	Purchase	9 units @ $55

There are 14 units of the item in the physical inventory at December 31. The periodic inventory system is used. Round average unit cost to one decimal and final answers to the nearest whole dollar, if required.

a. Determine the inventory cost by the first-in, first-out method.
$fill in the blank 1

b. Determine the inventory cost by the last-in, first-out method.
$fill in the blank 2

c. Determine the inventory cost by the weighted average cost method.
$fill in the blank 3

Answer 1

Solution

	Cost of Ending inventory
FIFO	$                 765
LIFO	$                 696
Weighted average	$                 736

Working

	Units	Cost per unit	value
Beginning Balance	9	$                   49.00	$ 441
Purchases
	10	$                   51.00	$ 510
	19	$                   54.00	$ 1,026
	9	$                   55.00	$ 495
Cost of goods available for sale	47		$ 2,472

.

Average Cost of Inventory
Units	(A)	47
Total Cost	(B)	$ 2,472
Average Cost	(C=B/A)	$ 52.60

.

FIFO
Total Units Available for sale		47
Units Sold		33
Closing Stock in Units		14
Valuation
Ending Inventory	9	@	$             55.00	$ 495
	5	@	$             54.00	$ 270
Value Of Ending Inventory				$ 765
LIFO
Total Units Available for sale		47
Units Sold		33
Closing Stock in Units		14
Valuation
Ending Inventory	9	@	$             49.00	$ 441
	5	@	$             51.00	$ 255
Value Of Ending Inventory				$                  696
Weighted Average method
Total Units Available for sale		47
Units Sold		33
Closing Stock in Units		14
Valuation
Ending Inventory	14	@	$             52.60	$                  736