Question

(b) Your answer is partially correct. Try again. Compute ending inventory at September 30 using FIFO, LIFO, and moving-average. (Round answers to O decimal places, e.g. 125.) FIFO LIFO AVERAGE-COST The ending inventory+ 3993 4878 3950.51

Pharoah Company sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Pharoah Company’s purchases of EZslide snowboards during September. During the same month, 106 EZslide snowboards were sold.

Sept 1. - Inventory - 14 units , $120 unit cost, total cost $1680

Sept. 12. - Purchases - 44 units, $123 unit cost, total cost $5412

Sept 19. - Purchases - 55 units, $124 unit cost, total cost $6820

Sept.26 - Purchases - 25 units, $125 unit cost, total cost $3125

Total: 138 units, $17037

Additional data regarding the company’s sales of EZslide snowboards are provided below. Assume that Pharoah Company uses a perpetual inventory system.

Sept.5 . - Sale - 8 units

Sept. 16 - Sale - 47 units

Sept. 29 - Sale - 51 units

Total: 106 units

Answer 1

Pharoah Company

	FIFO	LIFO	Weighted average
Ending inventory	(25 units × $ 125 per unit)+(7 units × $ 124 per unit) = 3,125+868 = $ 3,993	(3 units × $ 120 per unit)+(29 units × $ 124 per unit) = 3,596+360 = $ 3,956	32 units × $ 123.46 per unit* = $ 3,951

Ending inventory units = available units - sold units

= 138 units - 106 units = 32 units

Average cost = Cost of available units / available units

= $ 17,037 / 138 units = $ 123.46

FIFO inventory system is an assumption that first purchase units will sold first, LIFO inventory system is an assumption that recently purchased units will sold first.