Question

A company made the following merchandise purchases and sales during the month of May:

May 1	Purchased	380 units	@ $15 each
May 5	Purchased	270 units	@ $17 each
May 10	Sold	400 units	@ $50 each
May 20	Purchased	300 units	@ $22 each
May 25	Sold	400 units	@ $50 each

There was no beginning inventory. If the company uses the periodic inventory method, what would be the Cost of the Ending Inventory and the Cost of Goods Sold using 1. FIFO 2. LIFO and 3. Weighted Average?

Answer 1

	FIFO	LIFO	Weighted Average cost
Ending Inventory	$       3,300	$           2,250	$             2,667
Cost of goods sold	$     13,590	$         14,640	$          14,224
Workings:
	Cost of goods available for sale			Cost of goods sold - Periodic			Ending Inventory - Periodic
FIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Beginning Inventory	380	$                 15	$             5,700	380	$           15	$        5,700	-	$           15	$                -
Purchases:
May-05	270	$                 17	$             4,590	270	$           17	$        4,590	-	$           17	$                -
May-20	300	$                 22	$             6,600	150	$           22	$        3,300	150	$           22	$         3,300
	950		$          16,890	800		$      13,590	150		$         3,300
	Cost of goods available for sale			Cost of goods sold - Periodic			Ending Inventory - Periodic
LIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Beginning Inventory	380	$                 15	$             5,700	230	$           15	$        3,450	150	$           15	$         2,250
Purchases:
May-05	270	$                 17	$             4,590	270	$           17	$        4,590	-	$           17	$                -
May-20	300	$                 22	$             6,600	300	$           22	$        6,600	-	$           22	$                -
	950		$          16,890	800		$      14,640	150		$         2,250
	Cost of goods available for sale			Cost of goods sold - Periodic			Ending Inventory - Periodic
Weighted Average	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Beginning Inventory	380	$                 15	$             5,700
Purchases:
May-05	270	$                 17	$             4,590
May-20	300	$                 22	$             6,600
	950	$           17.78	$          16,890	800	$     17.78	$      14,224	150	$     17.78	$         2,667
Weighted average rate = $16890 / 950 = $17.78