Question

Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2016 is available:

Aug.1	Inventory on hand—10,500 units; cost $8.80 each.
8	Purchased 30,000 units for $7.50 each.
14	Sold 21,000 units for $14.00 each.
18	Purchased 16,000 units for $7.00 each.
25	Sold 20,000 units for $13.00 each.
31	Inventory on hand—15,500 units.

Required:

Determine the inventory balance Altira would report in its August 31, 2016, balance sheet and the cost of goods sold it would report in its August 2016 income statement using each of the following cost flow methods: (Round "Average Cost per Unit" to 2 decimal places.)

Ending Inventory-Periodic FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Cost of Goods #of units FIFO #of units sold Cost per Cost per unit Cost per Ending Inventory Cost of Available for in ending inventory # of units Goods Sold unit unit Sale 8.80 $ 10,500 $ 10,500 92,400 $ $ Beginning Inventory 8.80 92,400 8.80 0 Purchases 30,000 7.50 $ 225,000 August 8 225,000 30,000 7.50 7.50 0 7.00 $ $ August 18 16,000 112,000 7.00 7.00 Total $ 317,400 56,500 429,400 40,500 0 0

Answer 1

FIFO	Cost of goods available for sale			Cost of goods sold			Ending inventory
	# of units	Cost per unit	Total	# of units	Cost per unit	Total	# of units	Cost per unit	Total
Beginning inventory	10500	8.80	92400	10500	8.80	92400	0	8.80	0
Purchases:
August 8	30000	7.50	225000	30000	7.50	225000	0	7.50	0
August 18	16000	7.00	112000	500	7.00	3500	15500	7.00	108500
Total	56500		429400	41000		320900	15500		108500
LIFO	Cost of goods available for sale			Cost of goods sold			Ending inventory
	# of units	Cost per unit	Total	# of units	Cost per unit	Total	# of units	Cost per unit	Total
Beginning inventory	10500	8.80	92400	0	8.80	0	10500	8.80	92400
Purchases:
August 8	30000	7.50	225000	25000	7.50	187500	5000	7.50	37500
August 18	16000	7.00	112000	16000	7.00	112000	0	7.00	0
Total	56500		429400	41000		299500	15500		129900
Average cost	Cost of goods available for sale			Cost of goods sold			Ending inventory
	# of units	Cost per unit	Total	# of units	Cost per unit	Total	# of units	Cost per unit	Total
Beginning inventory	10500	8.80	92400
Purchases:
August 8	30000	7.50	225000
August 18	16000	7.00	112000
Total	56500	7.60	429400	41000	7.60	311600	15500	7.60	117800
Average cost	7.60	=429400/56500