Question

The units of an item available for sale during the year were as follows:

January 1	Inventory	40 Units at $165	$6,600
August 13	Purchase	200 Units at $180	$36,000
November 30	Purchase	60 Units at $200	$12,000
	Available for Sale	300 Units	$54,600

There are 75 Units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using the (a) first-in, first-out (FIFO) method; (b) last-in, first-out (LIFO) method; and (c) weighted average cost method.

Answer 1

Answers

	Ending Inventory
FIFO	$                14,700
LIFO	$                12,900
Weighted Average	$                13,650

--Workings

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	40	$              165.00	$                        6,600.00	40	$             165.00	$                 6,600.00	0	$              165.00	$                         -
Purchases:
13-Aug	200	$              180.00	$                      36,000.00	185	$             180.00	$               33,300.00	15	$              180.00	$            2,700.00
30-Nov	60	$              200.00	$                      12,000.00	0	$             200.00	$                              -	60	$              200.00	$          12,000.00
TOTAL	300		$                      54,600.00	225		$               39,900.00	75		$          14,700.00
LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	40	$              165.00	$                        6,600.00	0	$             165.00	$                              -	40	$              165.00	$            6,600.00
Purchases:
13-Aug	200	$              180.00	$                      36,000.00	165	$            180.00	$               29,700.00	35	$              180.00	$            6,300.00
30-Nov	60	$              200.00	$                      12,000.00	60	$             200.00	$               12,000.00	0	$              200.00	$                         -
TOTAL	300		$                      54,600.00	225		$               41,700.00	75		$          12,900.00
Average Method	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	40	$              165.00	$                        6,600.00
Purchases:
13-Aug	200	$              180.00	$                      36,000.00
30-Nov	60	$              200.00	$                      12,000.00
TOTAL	300	$            182.000	$                      54,600.00	225	$        182.0000	$               40,950.00	75	$          182.0000	$          13,650.00