Question

Sarasota Company’s record of transactions concerning part X for the month of April was as follows. Purchases Sales April 1 (balance on hand) 350 @ $6.60 April 5 550 4 650 @ 6.73 12 450 11 550 @ 7.00 27 1,300 18 450 @ 7.06 28 150 26 850 @ 7.39 30 450 @ 7.66Calculate average-cost per unit.

Assume that perpetual inventory records are kept in units only.

Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost.

If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, what amount would be shown as ending inventory under (1) FIFO, (2) LIFO and (3) Average-cost?

Answer 1

Ending inventory is as computed below:

FIFO-Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Apr-01									350		6.60	2,310
Balance									350			2,310
Apr-04	650		6.73	4,375					350		6.60	2,310
									650		6.73	4,375
Balance									1,000			6,685
Apr-05					350		6.60	2,310	450		6.73	3,029
					200		6.73	1,346
Balance									450			3,029
Apr-11	550		7	3,850					450		6.73	3,029
									550		7	3,850
Balance									1,000			6,879
Apr-12					450		6.73	3,029	550		7	3,850
Balance									550			3,850
Apr-18	450		7.06	3,177					550		7	3,850
									450		7.06	3,177
Balance									1,000			7,027
Apr-26	850		7.39	6,282					550		7	3,850
									450		7.06	3,177
									850		7.39	6,282
Balance									1,850			13,309
Apr-27					550		7	3,850
					450		7.06	3,177
					300		7.39	2,217	550		7.39	4,065
Balance									550			4,065
Apr-28					150		7.39	1108.5	400		7.39	2,956
Balance									400			2,956
Apr-30	450		7.66	3,447					400		7.39	2,956
									450		7.66	3,447
Balance	2,950			21,130	2,450			17,037	850			6,403
LIFO-Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Apr-01									350		6.60	2,310
Balance									350			2,310
Apr-04	650		6.73	4,375					350		6.60	2,310
									650		6.73	4,375
Balance									1,000			6,685
Apr-05					550		6.73	3,702	350		6.60	2,310
									100		6.73	673
Balance									450			2,983
									350		6.60	2,310
Apr-11	550		7	3,850					100		6.73	673
									550		7	3,850
Balance									650			4,523
Apr-12					450		7.00	3,150	350		6.60	2,310
									100		6.73	673
									100		7	700
Balance									550			3,683
Apr-18	450		7.06	3,177					350		6.60	2,310
									100		6.73	673
									100		7	700
									450		7.06	3,177
Balance									1,000			6,860
Apr-26	850		7.39	6,282					350		6.60	2,310
									100		6.73	673
									100		7	700
									450		7.06	3,177
									850		7.39	6,282
Balance									1,850			13,142
Apr-27					850		7.39	6,282	350		6.60	2,310
					450		7.06	3,177	100		6.73	673
									100		7	700
Balance									550			3,683
Apr-28					100		7	700	350		6.60	2,310
					50		6.73	336.5	50		6.73	337
Balance									400			2,647
Apr-30	450		7.66	3,447					350		6.60	2,310
									50		6.73	337
									450		7.66	3,447
Balance	2,950			21,130	2,450			17,347	850			6,094
Weighted Average -Perpetual
Date	Goods Purchased				Cost of goods sold				Ending Inventory
	Units	@	Cost per unit	Cost of purchase	Units sold	@	Cost per unit	Cost of goods sold	Units	@	Cost per unit	Ending balance
Apr-01									350		6.60	2,310
Balance									350			2,310
Apr-04	650		6.73	4,375					350		6.60	2,310
									650		6.73	4,375
Balance									1,000		6.68	6,685
Apr-05					550		6.68	3,676	450		6.68	3,008
Balance									450			3,008
Apr-11	550		7	3,850					450		6.68	3,008
									550		7.00	3,850
Balance									1,000		6.86	6,858
Apr-12					450		6.86	3,086	550		6.86	3,772
Balance									550		6.86	3,772
Apr-18	450		7.06	3,177					550		6.86	3,772
									450		7.06	3,177
Balance									1,000		6.95	6,949
Apr-26	850		7.39	6,282					1,000		6.95	6,949
									850		7.39	6,282
Balance									1,850		7.15	13,230
Apr-27					1,300		7.15	9,297	550		7.15	3,933
Balance									550			3,933
Apr-28					150		7.15	1072.73625	400		7.15	2,861
Balance									400			2,861
Apr-30	450		7.66	3,447					400		7.15	2,861
									450		7.66	3,447
Balance	2,950			21,130	2,450			17,132	850		7.42	6,308