Question

The following units of an item were available for sale during the year

Jan 1. Inventory 30 units @ $130

Mar 10. Purchase 70 units @ $140

Aug. 15. Purchased 10 units @ $145

Dec 10. Purchased 70 units @$150

There are 80 units of the item remaining in the physical inventory on December 31st. The periodic inventory system was used. Determine the inventory cost and cost of merchandise sold using the three main methods

Inventory Method Merchandise Inventory Cost

FIFO (first in, first out)   

LIFO (last in, first out)   

Weighted Avg Cost

Answer 1

	Units	Unit Cost	Total
Jan 1	30	130	3900
Mar 10	70	140	9800
Aug 15	10	145	1450
Dec 10	70	150	10500
Total	180		25650
Average cost	142.50	=25650/180
FIFO (first in, first out):
Merchandise Inventory Cost	11950	=(70*150)+(80-70)*145
Cost of merchandise sold	13700	=25650-11950
LIFO (last in, first out) :
Merchandise Inventory Cost	10900	=(30*130)+(80-30)*140
Cost of merchandise sold	14750	=25650-10900
Weighted Avg Cost:
Merchandise Inventory Cost	11400	=80*142.50
Cost of merchandise sold	14250	=25650-11400