Question

Required information [The following information applies to the questions displayed below.] Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021: Aug.1 Inventory on hand-3,900 units; cost $8.00 each. 8 Purchased 19,500 units for $7.40 each. 14 Sold 15,600 units for $13.90 each. 18 Purchased 11,700 units for $6.60 each. 25 Sold 14,600 units for $12.90 each. 28 Purchased 5,900 units for $5.80 each. 31 Inventory on hand-10,800 units. Required: 1. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using the FIFO method. Cost of Goods Available for Sale Cost of Goods Sold - August 14 Cost of Goods Sold - August 25 Inventory Balance Perpetual FIFO: # of units Cost per unit Cost of Goods Available for Sale $ 31,200 # of units sold Cost per unit Cost of Goods Sold # of units Cost per sold unit Cost of Goods Sold Total Cost of Goods Sold Cost per # of units in ending inventory Ending Inventory unit 3,900 $ 8.00 15,600 $ 8.00 $ 124,800 14,600 $ 8.00 $ 116,800 $ 8.00 $ 7.40 7.40 Beg. Inventory Purchases: August 8 August 18 August 28 Total 19,500 11,700 5,900 41,000 7.40 6.60 5.80 0 144,300 77,220 34,220 286,940 6.60 5.80 7.40 6.60 5.80 6.60 5.80 $ 15,600 $ 124,800 14,600 $ 116,800 $ 241,600 $

Answer 1

	Cost of goods available for sale			Cost of goods sold - Periodic FIFO			Ending Inventory - Periodic FIFO
Perpetual 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	3,900	$       8.00	$           31,200	3,900	$       8.00	$           31,200	-	$      8.00	$                -
Purchases:
Aug-08	19,500	$       7.40	$       1,44,300	19,500	$       7.40	$       1,44,300	-	$      7.40	$                -
Aug-18	11,700	$       6.60	$           77,220	6,800	$       6.60	$           44,880	4,900	$      6.60	$       32,340
Aug-28	5,900	$       5.80	$           34,220	-	$       5.80	$                    -	5,900	$      5.80	$       34,220
	41,000		$       2,86,940	30,200		$       2,20,380	10,800		$       66,560
	Purchases			Cost of goods sold			Inventory on hand
Perpetual Average	Quantity	Cost per unit	Total cost	Quantity	Cost per unit	Total cost	Quantity	Cost per unit	Total cost
Beginning Inventory	3,900	$       8.00	$           31,200				3,900	$      8.00	$       31,200
Aug-08	19,500	$       7.40	$       1,44,300				19,500	$      7.40	$   1,44,300
							23,400	$      7.50	$   1,75,500
Aug-14				15,600	$       7.50	$       1,17,000	7,800	$      7.50	$       58,500
Aug-18	11,700	$       6.60	$           77,220				11,700	$      6.60	$       77,220
							19,500	$      6.96	$   1,35,720
Aug-25				14,600	$       6.96	$       1,01,616	4,900	$      6.96	$       34,104
Aug-28	5,900	$       5.80	$           34,220				5,900	$      5.80	$       34,220
Totals	41,000		$       2,86,940	30,200		$       2,18,616	10,800		$       68,324
	Cost of goods available for sale			Cost of goods sold			Ending Inventory
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	3,900	$       8.00	$           31,200	-	$       8.00	$                    -	3,900	$      8.00	$       31,200
Purchases:
Aug-08	19,500	$       7.40	$       1,44,300	12,600	$       7.40	$           93,240	6,900	$      7.40	$       51,060
Aug-18	11,700	$       6.60	$           77,220	11,700	$       6.60	$           77,220	-	$      6.60	$                -
Aug-28	5,900	$       5.80	$           34,220	5,900	$       5.80	$           34,220	-	$      5.80	$                -
	41,000		$       2,86,940	30,200		$       2,04,680	10,800		$       82,260

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