Aiello, Inc. had the following inventory in fiscal 2016. Beginning Inventory, January 1, 2016: 130 units...

Aiello, Inc. had the following inventory in fiscal 2016.

Beginning Inventory, January 1, 2016: 130 units @ $15.00
Purchase 200 units @ $18.00
Purchase 50 units @ $13.50
Purchase 110 units @ $15.75

Total units sold during the month is 370.

a) Compute the company’s cost of goods sold and ending inventory for fiscal 2016 assuming the company used FIFO

b) Compute the company’s cost of goods sold and ending inventory for fiscal 2016 assuming the company used LIFO methods of accounting for inventory

c) Calculate the LIFO reserve that would be reported in the company's books if using LIFO.

Expert Solution

Answer a.

Cost of goods sold = $6,090
Ending inventory = $1,867.50

Answer b.

Cost of goods sold = $6,157.50
Ending inventory = $1,800

Answer c.

LIFO reserve = Ending inventory under FIFO - Ending inventory under LIFO
LIFO reserve = $1,867.50 - $1,800
LIFO reserve = $67.50

jeff jeffy answered 1 year ago

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