Question

Springer Company is a baseball wholesaler. The folowing information is available for 2018: Unit Cost $ 30.00 $ 32.00 Cost of Goods Sold Periodic Perpetual Beginning Inventory Purchase, April 5 Sale, April 15 (at $60 per unit) Purchase April 17 Purchase April 20 Sale, April 29 ($60 per bat) Purchase April 30 Units 10,000 30,000 25,000 20,000 20,000 50,000 10,000 FIFO $ $ 32.50 33.00 LIFO $ 33.50 Required: Determine Cost of Goods sold for the month of April using the periodic and perpetual method for (a) FIFO and (b) LIFO. Be sure to show your work below and place your answers in the box to the right. Note, no credit will be awarded without you showing your work.

Answer 1

Ans.	Cost of Goods Sold
		Periodic	Perpetual
	FIFO	$2,405,000	$2,405,000
	LIFO	$2,445,000	$2,420,000
	*WORKING NOTES:
Ans. 1	Total number of units sold (25,000 + 50,000) =   75,000 units
	Periodic FIFO:
	Date	Units	Rate	Total
	01-Apr	10000	$30.00	$300,000
	05-Apr	30000	$32.00	$960,000
	17-Apr	20000	$32.50	$650,000
	20-Apr	15000	$33.00	$495,000
	Cost of goods sold	75000		$2,405,000
	Perpetual FIFO:
	Purchase	Cost of goods sold	Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	01-Apr	10000	$30.00	$300,000				10000	$30.00	$300,000
	05-Apr	30000	$32.00	$960,000				10000	$30.00	$300,000
								30000	$32.00	$960,000
	15-Apr				10000	$30.00	$300,000
					15000	$32.00	$480,000	15000	$32.00	$480,000
	17-Apr	20000	$32.50	$650,000				15000	$32.00	$480,000
								20000	$32.50	$650,000
	20-Apr	20000	$33.00	$660,000				15000	$32.00	$480,000
								20000	$32.50	$650,000
								20000	$33.00	$660,000
	29-Apr				15000	$32.00	$480,000
					20000	$32.50	$650,000
					15000	$33.00	$495,000	5000	$33.00	$165,000
	30-Apr	10000	$33.50	$335,000				5000	$33.00	$165,000
								10000	$33.50	$335,000
	Total				Cost of goods sold		$2,405,000	Ending inventory	$500,000
	*In FIFO method the units that have purchased first (earliest), are released the first one and the ending inventory
	units remain from the last (recent) purchases.
Ans. 2	Periodic LIFO:
	Date	Units	Rate	Total
	30-Apr	10000	$33.50	$335,000
	20-Apr	20000	$33.00	$660,000
	17-Apr	20000	$32.50	$650,000
	05-Apr	25000	$32.00	$800,000
	Cost of goods sold	75000		$2,445,000

Perpetual LIFO: Cost of goods sold Rate Quantity Total cost Date 01-Apr 05-Apr Purchase Quantity 10000 30000 Rate $30.00 $32.00 Total cost $300,000 $960,000 15-Apr 25000 $32.00 $800,000 17-Apr Balance Rate $30.00 $30.00 $32.00 $30.00 $32.00 $30.00 $32.00 $32.50 $30.00 $32.00 $32.50 $33.00 20000 $32.50 $650,000 Quantity 10000 10000 30000 10000 5000 10000 5000 20000 10000 5000 20000 20000 Total cost $300,000 $300,000 $960,000 $300,000 $160,000 $300,000 $160,000 $650,000 $300,000 $160,000 $650,000 $660,000 20-Apr 20000 $33.00 $660,000 29-Apr 20000 20000 5000 5000 $33.00 $32.50 $32.00 $30.00 $660,000 $650,000 $160,000 $150,000 30-Apr 10000 $33.50 $335,000 5000 5000 10000 $30.00 $30.00 $33.50 $150,000 $150,000 $335,000 Total Cost of goods sold $2,420,000 Ending inventory $485,000 *In LIFO method the units that have purchased last, are released the first one and the ending inventory units remain from the first purchases.