Question

Penn 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 3,200 Unit Cost $ 11.00 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 6,200 4,200 7,600 12.00 4.00 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Do not round "Average cost per unit" and round your final answers to nearest whole dollar amount.) FIFO LIFO Average Cost Ending inventory Cost of goods sold IIIIIIIIIIIIII

Answer 1

	FIFO	LIFO	Average Cost
The ending inventory	$57,600	$88,000	$70,635
The cost of goods sold	$68,800	$38,400	$55,765
Average Cost
Units	Unit Cost
3,200	$11.00	$35,200
6,200	$12.00	$74,400
4,200	$4.00	$16,800
13,600		$126,400
Average cost per unit		$9.2941
Ending Inventory = 7,600 x $9.2941	$70,635
COGS = Beginning inventory + purchases - ending inventory
=	$35,200 + $91,200 - $70,635
=	$55,765
FIFO
Units	Unit Cost
3,400	$12.00	$40,800
4,200	$4.00	$16,800
Ending Inventory		$57,600
COGS = Beginning inventory + purchases - ending inventory
=	$35,200 + $91,200 - $57,600
=	$68,800
LIFO
Units	Unit Cost
3,200	$11.00	$35,200
4,400	$12.00	$52,800
Ending Inventory		$88,000
COGS = Beginning inventory + purchases - ending inventory
=	$35,200 + $91,200 - $57,600
=	$38,400