Question

Problem 6-5A Calculate ending inventory and cost of goods sold using FIFO and LIFO and adjust inventory using lower of cost and net realizable value (LO6-3, 6-6)

[The following information applies to the questions displayed below.]

For the current year, Parker Games has the following inventory transactions related to its traditional board games. Parker Games uses a periodic inventory system.

Date				Transaction	Units				Unit Cost				Total Cost
Jan.	1			Beginning inventory		114			$	19				$	2,166
Mar.	12			Purchase		73				14					1,022
Sep.	17			Purchase		43				7					301
						230								$	3,489
Jan. 1−Dec. 31				Sales		153

Because of the increasing popularity of electronic video games, Parker Games continues to see a decline in the demand for board games. Sales prices have decreased by over 50% during the year. At the end of the year, Parker estimates the net realizable value of the 77 units of unsold inventory to be $330.

Answer 1

FIFO Cost of Goods Available for Sale Cost of Goods Units Cost per unit Available for sale 114 $ 19.00 | $ 2,166 Cost of Goods sold - FIFO Cost per Cost of goods Units sold sold 114 $ 19.00 $ 2,166 Ending Inventory-FIFO Cost per Ending units unit Inventory 0 $ 19.00 $ unit Beginning Inventory Purchases: Mar 12 Sep 17 Total 39 $ 14.00 $ 546 476 73 $ 43 $ 230 14.00 7.00 1,022 301 3,489 34 $ 43 $ 77 14.00 7.00 $ $ $ $ $ 301 1 53 $ 2,712 777 Cost of Inventory as per FIFO (-) Adjustment for lower Net Realizable value Inventory Value 777 -447 330 447 Loss on Inventory Value Dr To Inventory (To record loss on NRV of inventory) $ 447 LIFO Cost of Goods Available for Sale Cost of Goods sold - LIFO Cost of Goods Cost per Cost of goods Units Cost per unit Units sold Available for sale unit sold 114 $ 19.00 $ 2,166 37 $ 19.00 $ 703 Ending Inventory-LIFO Cost per Ending units unit Inventory 77 $ 19.00 $ 1,463 Beginning Inventory Purchases: Mar 12 Sep 17 Total 73 $ 43 $ 230 14.00 7.00 $ $ $ 1,022 301 3,489 73 $ 14.00 43 $ 7.00 153 $ $ $ 1,022 301 2,026 0 $ 14.00 0 $ 7.00 77 $ $ $ 1,463 Cost of Inventory as per LIFO (-) Adjustment for lower Net Realizable value Inventory Value in 1,463 -1,133 330 $ 1,133 Loss on Inventory Value Dr To Inventory (To record loss on NRV of inventory) $ 1,133