Question

Inventory information for Part 311 of Flint Corp. discloses the following information for the month of June.

Exercise 8-10 Inventory Information for Part 311 of Flint Corp. discoses the following information for the month of June. June 1 11 20 Balance Purchased Purchased 303 units @ $14 796 units $17 503 units $18 June 10 15 27 Sold Sold Sold 203 units $33 499 units @ $35 303 units $37 Your answer is incorrect. Try again. Assuming that the periodic inventory method is used, compute the cost of goods sold and ending inventory under (1) LIFO and (2) FIFO. FIFO Cost of Goods Sold Ending Inventory LINK TO TEXT

Answer 1

Cost of goods available for sale = 303 * $14.00 + 796 * $17.00 + 503 * $18.00
Cost of goods available for sale = $26,828

Number of units available for sale = 303 + 796 + 503
Number of units available for sale = 1,602

Number of units sold = 203 + 499 + 303
Number of units sold = 1,005

Sales revenue = 203 * $33.00 + 499 * $35.00 + 303 * $37.00
Sales revenue = $35,375

Answer a.

Periodic LIFO:

Cost of goods sold = 503 * $18.00 + 502 * $17.00
Cost of goods sold = $17,588

Ending inventory = Cost of goods available for sale - Cost of goods sold
Ending inventory = $26,828 - $17,588
Ending inventory = $9,240

Periodic FIFO:

Cost of goods sold = 303 * $14.00 + 702 * $17.00
Cost of goods sold = $16,176

Ending inventory = Cost of goods available for sale - Cost of goods sold
Ending inventory = $26,828 - $16,176
Ending inventory = $10,652

Answer b.

Perpetual LIFO:

June 10 sale includes 203 units from June 1 balance
June 15 sale includes 499 units from June 11 purchase
June 27 sale includes 303 units from June 20 purchase

Cost of goods sold = 203 * $14.00 + 499 * $17.00 + 303 * $18.00
Cost of goods sold = $16,779

Ending inventory = Cost of goods available for sale - Cost of goods sold
Ending inventory = $26,828 - $16,779
Ending inventory = $10,049

Perpetual FIFO:

June 10 sale includes 203 units from June 1 balance
June 15 sale includes 100 units from June 1 balance and 399 units from June 11 purchase
June 27 sale includes 303 units from June 11 purchase

Cost of goods sold = 303 * $14.00 + 702 * $17.00
Cost of goods sold = $16,176

Gross profit = Sales revenue - Cost of goods sold
Gross profit = $35,375 - $16,176
Gross profit = $19,199