Question

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:

Aug.1	Inventory on hand—2,400 units; cost $6.50 each.
8	Purchased 12,000 units for $5.90 each.
14	Sold 9,600 units for $12.40 each.
18	Purchased 7,200 units for $5.40 each.
25	Sold 8,600 units for $11.40 each.
28	Purchased 4,400 units for $5.80 each.
31	Inventory on hand—7,800 units.

1. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using the FIFO method.

Cost of Goods Available for Sale Cost of Goods Sold - August 14 Cost of Goods Sold - August 25 Inventory Balance Perpetual FIFO: # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit | Cost of Goods Sold # of units Cost per sold unit Cost of Goods Sold Total Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory $ 0.00 $ 0.00 $ 0 $ 0.00 $ 0 1 01 Beg. Inventory Purchases: August 8 August 18 August 28 Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 | $ $ 0 0 $ 0 $ 0 0 0
2. Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using the Average cost method. (Round "Average Cost per Unit" to 2 decimal places.)

Answer 1

FIFO (perpetual)
	transaction	purchase			cost of goods sold			balanced inventory
date		unit	rate per unit	total	unit	rate per unit	total	unit	rate per unit	total
01-Aug	inventory	2,400	6.5	15,600	-	-	-	2,400	6.5	15,600
08-Aug	purchase	12,000	5.9	70,800	-	-	-	2,400	6.5	15,600
								12,000	5.9	70,800
14-Aug	sale	-	-	-	2,400	6.5	15,600
					7,200	5.9	42,480	4,800	5.9	28,320
18-Aug	purchase	7,200	5.4	38,880				4,800	5.9	28,320
								7,200	5.4	38,880
25-Aug	sale	-	-	-	4,800	5.9	28,320
					3,800	5.4	20,520	3,400	5.4	18,360
28-Aug	purchase	4,400	5.8	25,520	-	-	-	3,400	5.4	18,360
								4,400	5.8	25,520
31-Aug		26,000		1,50,800	18,200		1,06,920	7,800		43,880

Average cost method (perpetual)
	transaction	purchase			cost of goods sold			balanced inventory
date		unit	rate per unit	total	unit	rate per unit	total	unit	rate per unit	total
01-Aug	inventory	2,400	6.5	15,600	-	-	-	2,400	6.5	15,600
08-Aug	purchase	12,000	5.9	70,800	-	-	-	2,400	6.5	15,600
								12,000	5.9	70,800
14-Aug	sale	-	-	-	9,600	6	57,600	4,800	6	28,800
18-Aug	purchase	7,200	5.4	38,880				4,800	6	28,800
								7,200	5.4	38,880
25-Aug	sale	-	-	-	8,600	5.64	48,504	3,400	5.64	19,176
28-Aug	purchase	4,400	5.8	25,520	-	-	-	3,400	5.64	19,176
								4,400	5.8	25,520
31-Aug		26,000		1,50,800	18,200		1,06,104	7,800		44,696