Question

Bridgeport Appliance uses a perpetual inventory system. For its flat-screen television sets, the January 1 inventory was 5 sets at $575 each. On January 10, Bridgeport purchased 7 units at $710 each. The company sold 2 units on January 8 and 4 units on January 15.

Compute the ending inventory under FIFO.

Compute the ending inventory under LIFO.

Compute the ending inventory under moving-average cost.

Answer 1

FIFO Date Purchases Sales Balance Units Unit cost in $ Amount in $ Units Unit cost in $ Amount in $ Units Unit cost in $ Amount in $ 5 575 2875 1st Jan 8th Jan 2 575 1150 3 575 1725 10th Jan 7 710 4970 3 1725 575 710 7 4970 15th Jan 575 1725 1 710 710 6 710 4260 4260 Ending Inventory is 6 unit of $4260 value

LIFO Date Purchases Sales Balance Units Unit cost in $ Amount in $ Units Unit cost in $ Amount in $ Units Unit cost in $ Amount in $ 5 575 2875 1st Jan 8th Jan 2 575 1150 3 575 1725 10th Jan 7 710 4970 3 575 1725 7 710 4970 15th Jan 4 710 2840 3 1725 575 710 3 2130 3855 Ending Inventory 6 units of ($1725+$2130) = $3855

Moving average cost Purchases Sales Balance Date Units Unit cost in $ Amount in $ Units Unit cost in $ Amount in $ Units Unit cost in $ Amount in $ 1st Jan 5 575 2875 8th Jan 2 575 1150 3 575 1725 10th Jan 7 710 4970 7 10 575 710 669.5 1725 4970 6695 15th Jan 4 669.5 2678 6 669.5 4017 4017 Ending Inventory 6 units of $4017