Question

hi dear, please answer all the questions. these are not very long questions.

Udlcudo FIFO and LIFO Costs Under Perpetual Inventory System The following units of an item were available for sale during the year: Beginning inventory 22 units @ $46 Sale First purchase Sale 16 units @ $71 39 units @ $48 18 units @ $71 30 units @ $49 29 units @ $71 Second purchase Sale The firm uses the perpetual inventory system, and there are 28 units of the item on hand at the end of the year. a. What is the total cost of the ending inventory according to FIFO? b. What is the total cost of the ending inventory according to LIFO?

Answer 1

Answer

1)

a) Ending inventory -FIFO = $ 1,372

FIFO
Inventory Layer	Units *	Unit cost =	Total cost
Ending inventory -FIFO
From second purchase	28	49	$             1,372

b) Ending inventory LIFO = $ 1,300

LIFO
Inventory Layer	Units *	Unit cost =	Total cost
Ending inventory -LIFO
From Beginning inventory	22	46	$             1,012
From First Purchase	6	48	$                288
			$             1,300

2)

Weighted average Cost Flow Method

					Schedule of Cost of merchandise Sold
					Weighted Average cost Flow Method
		Purchases			Cost of Merchandise Sold			Inventory
Date	Quantity	Unit cost	Total Cost	Quantity	Unit cost	Total Cost	Quantity	Unit cost	Total Cost
1-Jan	30,000	$           30	$       900,000				30,000	$       30.0	$         900,000
18-Mar				24,000	$                   30	$              720,000	6000	$       30.0	$         180,000
2-May	54,000	$           31	$    1,674,000				60000	$       30.9	$      1,854,000
9-Aug				45000	$                   31	$          1,390,500	15000	$       30.9	$         463,500
20-Oct	21,000	$           32	$       674,100				36000	$       31.6	$      1,137,600
31-Dec	Balances					$          2,110,500	36000	$       31.6	$      1,137,600

3)

a)

Ending inventory -FIFO
a)from Nov 23-1130 units	1130	134	151420
b)Purchases from July 21-75 units	75	134	10050
Ending inventory -FIFO	1205		$ 161470

b)

Ending inventory -LIFO
a)from beginning inventory-1090 units	1090	130	141700
b)Purchases from Feb 17-115 units	115	132	15180
Ending inventory -LIFO	1205		$ 156880

c)

Weighted Average cost per unit =	Total Cost of Goods inventory/Total Units in Inventory
=	132.6055931

So Ending inventory =132.6055931*1205= $ 159790

4)

Periodic Inventory in Three methods

Cost of Merchandise Inventory and cost of Merchandise Sold
Inventory method	Merchandise Inventory	Merchandise Sold
First-in, First-out (FIFO)	$        (70*128)+(10*124) 10,200	$     13,880
Last-in ,First-out (LIFO)	$    (40*108)+(40*118) 9,040	$     15,040
Weighted Average cost	$        (24080/200)*80 9,632	$     14,448

5)

	Inventory at the Lower of Cost or Market
Inventory item	Total cost	Total Market	Total lower of cost or market
Birch	$           3,072	$            3,248	$                                    3,072
Cypress	$           1,530	$            2,142	$                                    1,530
Mountain Ash	$           5,502	$            5,334	$                                    5,334
Spruce	$           3,655	$            3,876	$                                    3,655
Willow	$           3,150	$            3,960	$                                    3,150
	$         16,909	$         18,560	$                                  16,741