Question

Assume your organization has the following inventory changes during the year: Beginning Inventory 15 units Valued at $10,000 each February purchases 13 units at $11,500 each June purchases 20 units at $12,000 each Total units used 42 Calculate the value of the ending inventory and the value of the inventory used (the inventory expense) for the year, using both the FIFO and the LIFO method of cost-flow.

Answer 1

Answers

• FIFO
  >Value of ending inventory = $ 72000
  >Value of inventory used = $ 467,500

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	15	$        10,000.00	$                    150,000.00	15	$       10,000.00	$            150,000.00	0	$        10,000.00	$                         -
Purchases:
16-Jun	13	$        11,500.00	$                    149,500.00	13	$       11,500.00	$            149,500.00	0	$        11,500.00	$                         -
28-Nov	20	$        12,000.00	$                    240,000.00	14	$       12,000.00	$            168,000.00	6	$        12,000.00	$          72,000.00
TOTAL	48		$                    539,500.00	42		$            467,500.00	6		$          72,000.00

• LIFO
  >Value of ending inventory = $ 60000
  >Value of inventory used = $ 479500

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	15	$        10,000.00	$                    150,000.00	9	$       10,000.00	$               90,000.00	6	$        10,000.00	$          60,000.00
Purchases:
16-Jun	13	$        11,500.00	$                    149,500.00	13	$       11,500.00	$            149,500.00	0	$        11,500.00	$                         -
28-Nov	20	$        12,000.00	$                    240,000.00	20	$       12,000.00	$            240,000.00	0	$        12,000.00	$                         -
TOTAL	48		$                    539,500.00	42		$            479,500.00	6		$          60,000.00