Question

BE6-3

Compute ending inventory using FIFO and LIFO.

In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7, and (3) 200 units at $8. Assuming there are 360 units on hand, compute the cost of the ending inventory under the (a) FIFO method and (b) LIFO method. Bethke uses a periodic inventory system.

BE6-4

Compute the ending inventory using average-cost.

Data for Bethke Company are presented in BE6-3. Compute the cost of the ending inventory under the average-cost method, assuming there are 360 units on hand. (Round average cost per unit to nearest cent.)

Answer 1

BE6-3
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Purchases
1	300	6	1800	300	6	1800
2	400	7	2800	240	7	1680	160	7	1120
3	200	8	1600				200	8	1600
TOTAL	900		6200	540		3480	360		2720
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Purchases
1	300	6	1800				300	6	1800
2	400	7	2800	340	7	2380	60	7	420
3	200	8	1600	200	8	1600
TOTAL	900		6200	540		3980	360		2220
			ENDING INVENTORY
	FIFO		$2,720
	LIFO		$2,220
BE6-4
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
Purchases
1	300	6	1800
2	400	7	2800
3	200	8	1600
TOTAL	900	6.89	6200	540	6.89	3721	360	6.89	2479
				Ending inventory
	Average Method			2479