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	$ 64	4 at	$ 70	4 at	$ 76	6
B15	8 at	$ 176	4 at	158	3 at	170	6 at	184	8
E60	3 at	75	3 at	65	15 at	68	9 at	70	5
G83	7 at	242	6 at	250	5 at	260	10 at	259	9
J34	12 at	240	10 at	246	16 at	267	16 at	270	15
M90	2 at	108	2 at	110	3 at	128	3 at	130	5
Q70	5 at	160	4 at	170	4 at	175	7 at	180	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.

Answer 1

1. Ending inventory under FIFO

Model	Quantity	Unit cost	Total cost
A10	4	76	304
A10	2	70	140
B15	6	184	1104
B15	2	170	340
E60	5	70	350
G83	9	259	2331
J34	15	270	4050
M90	3	130	390
M90	2	128	256
Q70	7	180	1260
Q70	1	175	175
Total	56		11144

2. Ending inventory under LIFO

Model	Quantity	Unit Cost	Total COst
A10	4	64	256
A10	2	70	140
B15	8	176	1408
E60	3	75	225
E60	2	65	130
G83	7	242	1694
G83	2	250	500
J34	12	240	2880
J34	3	246	738
M90	2	108	216
M90	2	110	220
M90	1	128	128
Q70	5	160	800
Q70	3	170	510
Total	56		9845

3. Ending inventory under weighted average

Model	Quantity	Unit cost	Total cost
A10	6	70	420
B15	8	174	1392
E60	5	69	345
G83	9	253	2277
J34	15	258	3870
M90	5	121	605
Q70	8	172	1376
Total	56		10285

4. FIFO inventroy method should be followed because increase in ending inventroy will decrease in profit o that tax will also be decreases