Question

please provide solutions!
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost $5 2,000 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 6 5,000 3,000 4,000 8 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. FIFO LIFO Average Cost Ending inventory Cost of goods sold

Answer 1

a) Calculate following

	Unit	Unit Cost	Total Cost
Beginning inventory	2000	5	10000
Purchase 1	5000	6	30000
Purchase 2	3000	8	24000
Total	10000		64000

Calculate following

	FIFO	LIFO	Average cost
Ending inventory	(24000+6000) = 30000	(10000+2000*6) = 22000	64000/10000*4000 = 25600
Cost of goods sold	34000	42000	64000-25600 = 38400

b) Calculate following

	Unit	Unit Cost	Total Cost
Beginning inventory	2000	5	10000
Purchase 1	6000	4	24000
Purchase 2	4000	2	8000
Total	12000		42000

Calculate following

	FIFO	LIFO	Average cost
Ending inventory	3000*2 = 6000	10000+4000 = 14000	10500
Cost of goods sold	36000	28000	31500