Question

Problem 6-6A (Part Level Submission) You are provided with the following information for Pharoah Inc. Pharoah Inc. uses the periodic system of accounting for its inventory transactions. March 1 Beginning inventory 2,050 liters at a cost of 61¢ per liter. March 3 Purchased 2,405 liters at a cost of 66¢ per liter. March 5 Sold 2,305 liters for $1.05 per liter. March 10 Purchased 3,990 liters at a cost of 73¢ per liter. March 20 Purchased 2,520 liters at a cost of 81¢ per liter. March 30 Sold 5,170 liters for $1.30 per liter.

(a1) Your answer is incorrect. Try again. Calculate the value of ending inventory that would be reported on the balance sheet, under each of the following cost flow assumptions. (Round answers to 2 decimal places, e.g. 125.25.) (1) Specific identification method assuming: (i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,305 liters from the March 3 purchase; and (ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 485 liters from March 1; 585 liters from March 3; 2,900 liters from March 10; 1,200 liters from March 20. (2) FIFO (3) LIFO

Answer 1

SI Part 1 Ending Inv. FIFO 274930 LIFO 220090 254945 Pharaoh Inc. In periodic inventory, dates are not considered for calculating cost of each sale, instead cost of goods sold is calculated at the end of period Total units sold are = 7475 units FIFO (periodic) Cost of goods available for sale COGS Ending Inventory Date No. of units cost p.u Cost of goods available for sale No. of units cost p.u COGS No. of units cost p.u Ending inventory Beg. Inv. 2050 61 125050 2050 61 125050 Purchases 2405 66 158730 2405 66 158730 3990 73 291270 3020 73 220460 970 73 70810 2520 81 204120 2520 81 204120 10965 779170 7475 504240 3490 274930 C OGS Date Beg. Inv. Purchases LIFO ( periodic) Cost of goods available for sale COGS No. of units cost p.u Cost of goods available for sale No. of units cost p. u 2050 61 125050 2405 66 158730 965 66 3990 73 291270 3990 73 2520 81 204120 2520 81 10965 779170 7475 Ending Inventory No. of units cost p.u Ending inventory 2050 61 125050 1440 66 95040 63690 291270 204120 559080 3490 220090 Date Beg. Inv. Purchases 61 Specific Identification Cost of goods available for sale COGS No. of units cost p.u Cost of goods available for sale No. of units cost p.u 2050 61 125050 1485 61 2405 66 158730 1890 66 3990 73 291270 2900 73 2520 81 204120 1200 81 10965 779170 7475 COGS No. of units 90585 565 124740 515 211700 1090 97200 1320 524225 3490 Ending Inventory cost p.u Ending inventory 34465 33990 73 79570 106920 254945 81