Question

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

220

units

@ $53.40 per unit

Mar.

5

Purchase

285

units

@ $58.40 per unit

Mar.

9

Sales

380

units

@ $88.40 per unit

Mar.

18

Purchase

145

units

@ $63.40 per unit

Mar.

25

Purchase

270

units

@ $65.40 per unit

Mar.

29

Sales

250

units

@ $98.40 per unit

Totals

920

units

630

units

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 125 units from beginning inventory and 255 units from the March 5 purchase; the March 29 sale consisted of 105 units from the March 18 purchase and 145 units from the March 25 purchase.

Compute the cost assigned to ending inventory using FIFO.

Compute the cost assigned to ending inventory using LIFO

.

Answer 1

1. FIFO METHOD
Date	Activities	Units Acquired at Cost		Units Sold at Retail		Closing Inventory Balance
		No. of Units	Price ($)	No. of Units	Price ($)	No. of Units	Price ($)	Closing Inventory ($)
Mar-01	Beginning inventory	220	53.4			220	53.4	11,748
Mar-05	Purchase	285	58.4			505	56.22	28,392
Mar-09	Sales			380	88.4	125	58.4	7,300
Mar-18	Purchase	145	63.4			270	61.09	16,493
Mar-25	Purchase	270	65.4			540	63.24	34,151
Mar-29	Sales			250	98.4	290	65.26206897	18,926
	Break-up of closing inventory :	Date	No. of Units	Price	Total
		Mar-18	20	63.4	1,268
		Mar-25	270	65.4	17,658
		Closing Inventory Balance	290	65.3	18,926
2. LIFO METHOD
Date	Activities	Units Acquired at Cost		Units Sold at Retail		Closing Inventory Balance
		No. of Units	Price ($)	No. of Units	Price ($)	No. of Units	Price ($)	Closing Inventory ($)
Mar-01	Beginning inventory	220	53.4			220	53.4	11,748
Mar-05	Purchase	285	58.4			505	56.22	28,392
Mar-09	Sales			380	88.4	125	53.4	6,675
Mar-18	Purchase	145	63.4			270	58.77	15,868
Mar-25	Purchase	270	65.4			540	62.09	33,526
Mar-29	Sales			250	98.4	290	59.22758621	17,176
	Break-up of closing inventory :	Date	No. of Units	Price	Total
		Mar-01	125	53.4	6,675
		Mar-18	145	63.4	9,193
		Mar-25	20	65.4	1,308
		Closing Inventory Balance	290	59.2	17,176
3. WEIGHTED AVERAGE METHOD
Date	Activities	Units Acquired at Cost		Units Sold at Retail		Closing Inventory Balance
		No. of Units	Price ($)	No. of Units	Price ($)	No. of Units	Price ($)	Closing Inventory ($)
Mar-01	Beginning inventory	220	53.4			220	53.4	11,748
Mar-05	Purchase	285	58.4			505	56.22	28,392
Mar-09	Sales			380	88.4	125	56.22	7,028
Mar-18	Purchase	145	63.4			270	60.08	16,221
Mar-25	Purchase	270	65.4			540	62.74	33,879
Mar-29	Sales			250	98.4	290	62.74	18,194
	Break-up of closing inventory :	Date	No. of Units	Price	Total
		Closing Inventory Balance	290	62.7	18,194
4. SPECIFIC IDENTIFICATION METHOD
Date	Activities	Units Acquired at Cost		Units Sold at Retail		Closing Inventory Balance
		No. of Units	Price ($)	No. of Units	Price ($)	No. of Units	Price ($)	Closing Inventory ($)
Mar-01	Beginning inventory	220	53.4			220	53.4	11,748
Mar-05	Purchase	285	58.4			505	56.22	28,392
Mar-09	Sales			380	88.4	125	54.60	6,825
Mar-18	Purchase	145	63.4			270	59.33	16,018
Mar-25	Purchase	270	65.4			540	62.36	33,676
Mar-29	Sales			250	98.4	290	60.46896552	17,536
	Break-up of closing inventory :	Date	No. of Units	Price	Total
		Mar-01	95	53.4	5,073
		Mar-05	30	58.4	1,752
		Mar-18	40	63.4	2,536
		Mar-25	125	65.4	8,175
		Closing Inventory Balance	290	60.5	17,536