Question

Periodic Inventory by Three Methods

Dymac Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the next 12 months, and the inventory count at December 31 are summarized as follows:

Purchases Invoices
Model	Inventory, January 1		1st		2nd		3rd		Inventory Count, December 31
A10	__		4 at	$ 44	4 at	$ 47	4 at	$ 50	5
B15	8 at	$ 94	4 at	85	3 at	91	6 at	98	7
E60	3 at	69	3 at	59	15 at	62	9 at	64	5
G83	7 at	221	6 at	229	5 at	239	10 at	238	9
J34	12 at	79	10 at	81	16 at	88	16 at	89	13
M90	2 at	116	2 at	118	3 at	136	3 at	138	5
Q70	5 at	163	4 at	173	4 at	178	7 at	183	8

Required:

1. Determine the cost of the inventory on December 31 by the first-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

Dymac Appliances Cost of the Inventory-FIFO Method December 31
Model	Quantity		Unit Cost		Total Cost
A10		$		$
A10
B15
B15
E60
G83
J34
M90
M90
Q70
Q70
Total				$

2. Determine the cost of the inventory on December 31 by the last-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

Dymac Appliances Cost of the Inventory-LIFO Method December 31
Model	Quantity		Unit Cost		Total Cost
A10		$		$
A10
B15
E60
E60
G83
G83
J34
J34
M90
M90
M90
Q70
Q70
Total				$

3. Determine the cost of the inventory on December 31 by the weighted average cost method.

Dymac Appliances Cost of the Inventory-Weighted Average Method December 31
Model	Quantity		Unit Cost		Total Cost
A10		$		$
B15
E60
G83
J34
M90
Q70
Total				$

4. would be preferred for income tax purposes in periods of rising prices.

Previous

Answer 1

1.FIFO Method

Model	Quantity ($)	Unit Cost ($)	Total Cost ($)
A10	4	50	200
A10	1	47	47
B15	6	98	588
B15	1	91	91
E60	5	64	320
G83	10	238	2,380
J34	13	89	1,157
M90	3	138	414
M90	2	136	272
Q70	7	183	1,281
Q70	1	183	183
Total	52	1,326	6,933

2. Last in First Out Method

Model	Quantity ($)	Unit Cost ($)	Total Cost ($)
A10	4	44	176
A10	1	47	47
B15	7	94	658
E60	3	69	207
E60	2	59	118
G83	7	221	1,547
GF83	2	229	458
J34	12	79	948
J34	1	81	81
M90	2	116	232
M90	2	118	236
M90	1	136	136
Q70	5	163	815
Q70	3	173	519
Total	52	1,688	6,178

Weighted Method

Model	Quantity($)	Unit Cost ($)	Total Cost($)
AA10	5	47	235
B15	7	93	653
E60	5	63	315
G83	9	232	2,088
J34	13	85	1,105
M90	5	129	645
Q70	8	175	1,400
Total	52	824	6,441

4. It's better to use last in first out (LIFO) method when there is rice in price because last in inventory will have the high cost which will reduce the gross profit and income tax payable.

Notes

Total cost = Unit price * Number unit in inventory.

Per unit cost in weighted average method = total cost on purchase of units /Number of units purchased.