Question

In its first month of operations, Blossom Company made three purchases of merchandise in the following sequence: (1) 260 units at $5, (2) 360 units at $7, and (3) 460 units at $8. Assuming there are 160 units on hand at the end of the period, compute the cost of the ending inventory under (a) the FIFO method and (b) the LIFO method. Blossom Company uses a periodic inventory system. The Ending Inventory 24 FIFO 24 LIFO

Answer 1

FIFO METHDO
		COST OF GOODS AVAILABLE FOR SALE			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	No. of Units	Cost Per unit	Total	No. of Units	Cost Per unit	Cost of Goods Sold	No. of Units	Cost Per unit	Ending invetory
Purchases:
Purch - 1	Purchases	260	$                5.00	$1,300	260	$           5.00	$1,300
Purch - 2	Purchases	360	$                7.00	$2,520	360	$           7.00	$2,520
Purch - 3	Purchases	460	$                8.00	$3,680	300	$           8.00	$2,400	160	$           8.00	$1,280
	Total	1,080		$7,500	920		$6,220	160		$1,280
LIFO METHDO
		COST OF GOODS AVAILABLE FOR SALE			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	No. of Units	Cost Per unit	Total	No. of Units	Cost Per unit	Cost of Goods Sold	No. of Units	Cost Per unit	Ending invetory
Purchases:
Purch - 1	Purchases	260	$                5.00	$1,300	100	$           5.00	$500	160	$           5.00	$800
Purch - 2	Purchases	360	$                7.00	$2,520	360	$           7.00	$2,520
Purch - 3	Purchases	460	$                8.00	$3,680	460	$           8.00	$3,680
	Total	1,080		$7,500	920		$6,700	160		$800
	Answer =	The Ending inventory
	FIFO	$1,280
	LIFO	$800