Periodic Inventory by Three Methods
The units of an item available for sale during the year were as follows:
Jan. 1 | Inventory | 1,030 units @ $126 |
Feb. 17 | Purchase | 1,430 units @ $128 |
Jul. 21 | Purchase | 1,610 units @ $130 |
Nov. 23 | Purchase | 1,125 units @ $132 |
There are 1,200 units of the item in the physical inventory at December 31. The periodic inventory system is used. Do not round intermediate calculation and round final answer to nearest whole value.
a. Determine the inventory cost by the
first-in, first-out method.
$
b. Determine the inventory cost by the last-in,
first-out method.
$
c. Determine the inventory cost by the weighted
average cost method.
$
Answer a. is $158250 Under FIFO method
Answer b. is $151540 under LIFO method
Answer c is $154908 Under Weighted Average Cost Method
Detailed workings are as following
a | FIFO Method | |||||
Ending Inventory Valuation | ||||||
From | Units | Rate | Total | |||
From July 23 Purchase | 1125 | x | $ 132 | = | $ 148,500 | |
From July 21 Purchase | 75 | x | $ 130 | = | $ 9,750 | |
1200 | $ 158,250 | |||||
b | LIFO Method | |||||
Ending Inventory Valuation | ||||||
From | Units | Rate | Total | |||
From Beginning Inventory | 1030 | x | $ 126 | = | $ 129,780 | |
From Feb 17 purchase | 170 | x | $ 128 | = | $ 21,760 | |
1200 | $ 151,540 | |||||
c | Weighted average method | |||||
Units | Rate | Total | ||||
Beginning Inventory | 1030 | x | $ 126 | = | $ 129,780 | |
Feb 17 purchase | 1430 | x | $ 128 | = | $ 183,040 | |
July 21 Purchase | 1610 | x | $ 130 | = | $ 209,300 | |
July 23 Purchase | 1125 | $ 132 | $ 148,500 | |||
Total | 5195 | $ 670,620 | ||||
Weighted Average | $ 670,620 | / | 5195 | = | $ 129.09 | |
Ending Inventory | 1200 | x | $ 129.09 | = |
$ 154,908 (rounded off to nearest dollar) |
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