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	$ 30	4 at	$ 33	4 at	$ 36	5
B15	8 at	$ 91	4 at	82	3 at	88	6 at	95	7
E60	3 at	69	3 at	59	15 at	62	9 at	64	5
G83	7 at	214	6 at	222	5 at	232	10 at	231	9
J34	12 at	57	10 at	59	16 at	66	16 at	67	13
M90	2 at	108	2 at	110	3 at	128	3 at	130	5
Q70	5 at	156	4 at	166	4 at	171	7 at	176	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

Dymac Appliances
Cost of the Inventory-FIFO Method
31-Dec
Model	Quantity	@	Unit Cost		Total Cost
A10	4	$   36.00	$   144.00
A10	1	$   33.00	$     33.00		$   177.00
B15	6	$   95.00	$   570.00
B15	1	$   88.00	$     88.00		$   658.00
E60	5	$   64.00	$   320.00		$   320.00
G83	9	$ 231.00	$2,079.00		$2,079.00
J34	13	$   67.00	$   871.00		$   871.00
M90	3	$ 130.00	$   390.00
M90	2	$ 128.00	$   256.00		$   646.00
Q70	7	$ 176.00	$1,232.00
Q70	1	$ 171.00	$   171.00		$1,403.00
Total	52		$6,154.00		$6,154.00

Dymac Appliances
Cost of the Inventory-LIFO Method
31-Dec
Model	Quantity	@	Unit Cost		Total Cost
A10	4	$   30.00	$   120.00
A10	1	$   33.00	$     33.00		$   153.00
B15	7	$   91.00	$   637.00		$   637.00
E60	3	$   69.00	$   207.00
E60	2	$   59.00	$   118.00		$   325.00
G83	7	$ 214.00	$1,498.00
G83	2	$ 222.00	$   444.00		$1,942.00
J34	12	$   57.00	$   684.00
J34	1	$   59.00	$     59.00		$   743.00
M90	2	$ 108.00	$   216.00
M90	2	$ 110.00	$   220.00
M90	1	$ 128.00	$   128.00		$   564.00
Q70	5	$ 156.00	$   780.00
Q70	3	$ 166.00	$   498.00		$1,278.00
Total	52		$5,642.00		$5,642.00

Dymac Appliances
Cost of the Inventory-Weighted Average Method
31-Dec
Model	Quantity	@	Unit Cost		Total Cost
A10	5	$   33.00	$   165.00		$   165.00
B15	7	$   90.00	$   630.00		$   630.00
E60	5	$   63.00	$   315.00		$   315.00
G83	9	$ 225.00	$2,025.00		$2,025.00
J34	13	$   63.00	$   819.00		$   819.00
M90	5	$ 121.00	$   605.00		$   605.00
Q70	8	$ 168.00	$1,344.00		$1,344.00
Total	52		$1,344.00		$1,344.00

Weighted Average Cost Calculation
	A10
Opening Inventory	0	$              -	$               -
1st	4	$     30.00	$     120.00
2nd	4	$     33.00	$     132.00
3rd	4	$     36.00	$     144.00
Average Cost	12	$       33.00	$     396.00
	B15
Opening Inventory	8	$       91.00	$     728.00
1st	4	$     82.00	$     328.00
2nd	3	$     88.00	$     264.00
3rd	6	$     95.00	$     570.00
Average Cost	21	$       90.00	$ 1,890.00
	E60
Opening Inventory	3	$       69.00	$     207.00
1st	3	$     59.00	$     177.00
2nd	15	$     62.00	$     930.00
3rd	9	$     64.00	$     576.00
Average Cost	30	$       63.00	$ 1,890.00
	G83
Opening Inventory	7	$     214.00	$ 1,498.00
1st	6	$   222.00	$ 1,332.00
2nd	5	$   232.00	$ 1,160.00
3rd	10	$   231.00	$ 2,310.00
Average Cost	28	$     225.00	$ 6,300.00
	J34
Opening Inventory	12	$       57.00	$     684.00
1st	10	$     59.00	$     590.00
2nd	16	$     66.00	$ 1,056.00
3rd	16	$     67.00	$ 1,072.00
Average Cost	54	$       63.00	$ 3,402.00
	M90
Opening Inventory	2	$     108.00	$     216.00
1st	2	$   110.00	$     220.00
2nd	3	$   128.00	$     384.00
3rd	3	$   130.00	$     390.00
Average Cost	10	$     121.00	$ 1,210.00
	Q70
Opening Inventory	5	$     156.00	$     780.00
1st	4	$   166.00	$     664.00
2nd	4	$   171.00	$     684.00
3rd	7	$   176.00	$ 1,232.00
Average Cost	20	$     168.00	$ 3,360.00

Part 4

LIFO method Is best in case of rising prices as it gives highest amount of Cost of Goods Sold