Question

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Tipton Processing maintains its Internal Inventory records using average cost under a perpetual Inventory system. The following Information relates to Its Inventory during the year: Jan. 1 Inventory on hand-84, eee units; cost $4.00 each. Feb. 14 Purchased 116,000 units for $5.00 each. Mar. 5 Sold 154,000 units for $14.00 each. Aug. 27 Purchased 54,200 units for $6.00 each. Sep. 12 Sold 64,800 units for $14.00 each. Dec. 31 Inventory on hand-36, e38 units. Required: 1. Determine the amount Tipton would calculate Internally for ending Inventory and cost of goods sold using average cost under a perpetual Inventory system. 2. Determine the amount Tipton would report externally for ending Inventory and cost of goods sold using last-In, first-out (LIFO) under a periodic Inventory system. 3. Determine the amount Tipton would report for its LIFO reserve at the end of the year. 4. Record the year-end adjusting entry for the LIFO reserve, assuming the balance at the beginning of the year was $8,400. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the amount Tipton would calculate internally for ending inventory and cost of goods sold using average cost under a perpetual inventory system. (Round "Cost per Unit" to 2 decimal places.) Inventory on hand Cost of Goods Sold Inventory Balance Perpetual Average # of units Cost per unit Inventory Value # of units Avg.Cost Cost of I sold per unit | Goods Sold # of units in ending inventory Cost per unit Ending inventory Beginning Inventory Purchase - February 14 Sale - March 5 +chase - August 27 Sale - September 12 Total Required 1 Required 2 >

Answer 1

Note: LIFO Reserve is the difference between the value of Closing inventory in both the cases.

Perpetual Average Inventory on Hand Cost Per Unit of Units Inventory Balance Cost Per Unit Inventory Value Cost of Goods Sold Avg. Cost Per Unit Cost of Goods Sold of Units Ending Inventory of Units in Ending Inventory 4 Beginning Inventory Purchase- February 14 34000 116000 3 36000 5 80000 34000 200000 4.00 4. 58 336000 16000 51 9 T 54000 4.581 7053201 Sale- March 5 Purchase-August 27 5 4000 6 1 324000 46000 100000 4.58 5.35 210680 534680 5.35 3 36000 5.351 192484.81 Sale- September 12 Total 640001 218000 42195.21 1047515.2 2540001 1240000 Inventory on Hand Cost Per Unit Inventory Balance Cost Per Unit # of Units of Units Cost of Goods Sold Cost Per Unit Cost of Goods Sold Cost of Goods Available for Sale Ending Inventory of Units in Ending Inventory Beginning Inventory 34000 4 3 36000 48000 4 1 192000 92000 36000 36000 4 144000 Purchases 5 0 Feb-14 Aug-27 116000 54000 254000 5 6 5 80000 324000 1240000 1160001 54000 2180001 6 580000 324000l 096000 Total 1 LIFO Reserve 1 4 8484.8 Credit Transaction 1 General Journal Debit Cost of Goods Sold A/C TO LIFO Reserve A/C 48484.8 4848481