In comparing the ending inventory balances of FIFO andLIFO, the ending inventory value under FIFO...

Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):

40 units at $100 per unit

70 units at $80 per unit

170 units at $60 per unit

Sales for the year totaled 270 units, leaving 10 units on hand at the end of the year.

In comparing the ending inventory balances of FIFO and LIFO, the ending inventory value under FIFO less the ending inventory balance under LIFO results in a difference of:

$400.

$(400).

$0.

$50.

Expert Solution


The Correct answer is option B i.e. $ (400)
The same has been illustrated below

Inventory Balance as per FIFO
	Purchases
Lot No.	Units	Rate	Amount

1	40	100	4000
2	70	80	5600
3	170	60	10200

Sales

270 units

It will first deduct from Lot No.1	40	100	4000
Then it will dedut from Lot No. 2	70	80	5600
Balance 160 units from Lot no 3	160	60	9600

Balance available from Lot 3	10	60	600

Inventory Balance as per LIFO

Lot No.	Units	Rate	Amount
	Purchases
1	40	100	4000
2	70	80	5600
3	170	60	10200

Sales

270 units

It will first deduct from Lot No.3	170	60	10200
Then it will dedut from Lot No. 2	70	80	5600
Balance 160 units from Lot no 1	30	100	3000

Balance available from Lot 1	10	100	1000

Difference between two	600-1000
	$ (400)

Please do upvote if you found the answer useful.
Feel free to reach in the comment section in case of any clarification or queries.

ekkarill92 answered 2 years ago

Computing Cost of Goods Sold and Ending Inventory Under FIFO, LIFO, and Average Cost Assume that...

Computing Cost of Goods Sold and Ending Inventory Under FIFO, LIFO, and Average Cost Assume that Madden Company reports the following initial balance and subsequent purchase of inventory. Inventory balance at beginning of year 1,820 units @ $150 each $273,000 Inventory purchased during the year 2,380 units @ $180 each 428,400 Cost of goods available for sale during the year 4,200 units $701,400 Assume that 2,800 units are sold during the year. Compute the cost of goods sold for the...

how do you calculate ending inventory or cost of goods sold under LIFO and FIFO ...

how do you calculate ending inventory or cost of goods sold under LIFO and FIFO how do you use the Gross Profit Method to estimate a loss of inventory how do you use the relative sales value method of allocating cost to items purchased What are the common disclosures required for inventory?

Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods.

Penn Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1:Required Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods.

There are 10 units in ending inventory compute the value of the ending inventory using the...

There are 10 units in ending inventory compute the value of the ending inventory using the periodic inventory method. Compute the answer using FIFO, LIFO and the average cost methods. (round your answer to the nearest whole number) Price Cost Number Per Per Date Transaction of units unit Purchase Apr. 3 Inventory 2 10 20 8 Purchase 2 15 30 11 Purchase 3 20 60 30 Purchase 2 25 50 May 8 Purchase 3 25 75 10 Purchase 3 30...

E7-6 Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2...

E7-6 Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, prior year 1,810 $ 8 For the current year: Purchase, March 21 6,020 7 Purchase, August 1 4,010 5 Inventory, December 31, current year 2,920 Find LIFO...

Study the FIFO and LIFO explanations in Chapter 8. 1) Compute ending FIFO inventory and cost of goods sold.

FIFO & LIFO InventoryStudy the FIFO and LIFO explanations in Chapter 8. 1) Compute ending FIFO inventory and cost of goods sold. Assume $90,000 sales; beginning inventory 500 units @$50; purchases of 400 units @$50; 100 units @$65; 400 units @$80. 2) Compute the cost of goods sold percentage of sales. 3) Compute ending LIFO inventory and cost of goods sold, using same assumptions. 4) Compute the cost of goods sold percentage of sales. 5) Comment on the difference in...

Calculate Uncle Butch's' ending inventory using the retail inventory method under the FIFO cost flow assumption. Round the cost-to-retail ratio to 3 decimal places.

Retail Inventory MethodUncle Butch's Hunting Supply Shop reports the following information related to inventory:Beginning inventory Cost- $ 35,000 Retail- $ 92,000Purchases Cost- 75,000 Reatil- 200,000Net additional markups Cost- 0 Retail- 15,000Net markdowns Cost- 0 Retail- (22,000)Goods available for sale Cost- $110,000 Retail- $ 285,000Sales (178,000)Ending inventory at retail $ 107,000Calculate Uncle Butch's' ending inventory using the retail inventory method under the FIFO cost flow assumption. Round the cost-to-retail ratio to 3 decimal places.

Use the format in Exhibit 9-1 to compute the ending FIFO inventory and cost of goods...

Use the format in Exhibit 9-1 to compute the ending FIFO inventory and cost of goods sold assuming: $600,000 in sales Beginning inventory 1125 units @ $175 Purchases of 890 units @ $150 450 units @ $165 200 units @ $140 Ending inventory 845 units Using the FIFO method, what is the cost of goods sold percentage of sales? Use the format in Exhibit 9-1 to compute the ending FIFO inventory and cost of goods sold assuming: $560,000 in sales...

Based on the following information, calculate the cost of goods sold and ending inventory using FIFO,...

Based on the following information, calculate the cost of goods sold and ending inventory using FIFO, LIFO, and weighted average assuming a perpetual inventory system is in place. Beginning Balance - 90 units at $11 March 3 - Purchase 300 units for $15 April 4 - Sell 240 units for $28 June 30 - Purchase 250 units for $18 August 16 - Sell 180 units for $30

Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Perpetual...

Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Perpetual FIFO: Goods Purchased Cost of Goods Sold Inventory Balance Date # of units Cost per unit # of units sold Cost per unit Cost of Goods Sold # of units Cost per unit Inventory Balance January 1 290 @ $13.60 = $3,944.00 January 10 260 @ $13.60 = $3,536.00 30 @ $13.60 = $408.00 March 14 500 @ $18.60 30 @ $13.60 = $408.00...

Question