Bonita Company’s record of transactions for the month of April was as follows.
Average cost
Date | Purchases / Sale | Inventory balance | Rate | Closing Inventory | Average Cost |
01-Apr | - | 780 | 6.00 | 4,680 | 6.00 |
03-Apr | -650 | 130 | 6.00 | 780 | 6.00 |
04-Apr | 1,950 | 2,080 | 6.08 | 12,636 | 6.08 |
08-Apr | 1,040 | 3,120 | 6.40 | 19,292 | 6.18 |
09-Apr | -1,820 | 1,300 | 8,038 | 6.18 | |
11-Apr | -780 | 520 | 3,215 | 6.18 | |
13-Apr | 1,560 | 2,080 | 6.50 | 13,355 | 6.42 |
21-Apr | 910 | 2,990 | 6.60 | 19,361 | 6.48 |
23-Apr | -1,560 | 1,430 | 9,260 | 6.48 | |
27-Apr | -1,170 | 260 | 1,684 | 6.48 | |
29-Apr | 650 | 910 | 6.79 | 6,097 | 6.70 |
LIFO | |||||
Date | Purchases / Sale | Inventory balance | Rate | Closing Inventory | Average Cost |
01-Apr | - | 780 | 6.00 | 4,680 | 6.00 |
03-Apr | -650 | 130 | 6.00 | 780 | 6.00 |
04-Apr | 1,950 | 2,080 | 6.08 | 12,636 | 6.08 |
08-Apr | 1,040 | 3,120 | 6.40 | 19,292 | 6.18 |
09-Apr | -1,820 | 1,300 | 7,894 | 6.07 | |
11-Apr | -780 | 520 | 3,151 | 6.06 | |
13-Apr | 1,560 | 2,080 | 6.50 | 13,291 | 6.39 |
21-Apr | 910 | 2,990 | 6.60 | 19,297 | 6.45 |
23-Apr | -1,560 | 1,430 | 9,066 | 6.34 | |
27-Apr | -1,170 | 260 | 1,461 | 5.62 | |
29-Apr | 650 | 910 | 6.79 | 5,875 | 6.46 |
The Average cost of Inventory is $6.70 | |||||
The Inventory value at Average cost is $6,097.09 & LIFO is $5,874.70 |
FIFO | |||||
Date | Purchases / Sale | Inventory balance | Rate | Closing Inventory | Average Cost |
01-Apr | - | 780 | 6.00 | 4,680 | 6.00 |
03-Apr | -650 | 130 | 6.00 | 780 | 6.00 |
04-Apr | 1,950 | 2,080 | 6.08 | 12,636 | 6.08 |
08-Apr | 1,040 | 3,120 | 6.40 | 19,292 | 6.18 |
09-Apr | -1,820 | 1,300 | 8,237 | 6.34 | |
11-Apr | -780 | 520 | 3,328 | 6.40 | |
13-Apr | 1,560 | 2,080 | 6.50 | 13,468 | 6.48 |
21-Apr | 910 | 2,990 | 6.60 | 19,474 | 6.51 |
23-Apr | -1,560 | 1,430 | 9,499 | 6.64 | |
27-Apr | -1,170 | 260 | 1,829 | 7.03 | |
29-Apr | 650 | 910 | 6.79 | 6,242 | 6.86 |
Under FIFO , Inventory value is $6,242 & under LIFO Inventory value is $5,875
Cost of goods sold under FIFO is opening Inventory + Purchases - Closing Inventory
= $4,680+ $39,072-$6,242 = $37,509
In Inflationary period , FIFO method will show highest Net income because under FIFO the Purchases made first will be used first and thus with Inflation economy , the purchases with higher cost will be remaining in Inventory will result in higher Closing Inventory value.
Bonita Company’s record of transactions for the month of April was as follows. Bonita Company's record...
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