Question

Trey Monson starts a merchandising business on December 1 and enters into three inventory purchases: Purchases on December 7 Purchases on December 14 Purchases on December 21 15 units $18.00 cost 30 units @ $27.00 cost 25 units @ $32.00 cost Required: Monson sells 25 units for $45 each on December 15. Assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the LIFO method. Answer is complete but not entirely correct. Periodic LIFO: Cost of Goods Available for Sale Cost of Goods Sold Inventory Balance # of Cost per unit Cost of Goods Available for Sale # of units Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit units Ending Inventory sold Purchases: December 7 15 $ 18.00 $ 270 $ 15 X 18.00 $ 270 $ 0 x 18.00 $ 0 30 27.00 810 10 X 27.00 $ 270 20 X 27.00 540 December 14 December 21 Total 25 32.00 800 0 X 32.00 25 Ⓡ 32.00 $ 800 70 $ 1,880 25 $ 540 45 $ 1,340

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Answer 1

Periodic : LIFO Goods Purchasd Cost of Goods Sold cost of Goods Available # of Units Cost Per Cost of # of # of Units Cost Per Unit for sales sold Unit Goods Sold Units Inventory Balance Cost Per Unit Inventory Ending Purchases 0 270 Mar-10 Aug-30 Dec-12 18 27 0 15 30 25 70 270 8101 800 1880 18 27 32 0 0 800 800 15 30 0 18 27 32 32 25 25 810 0 1080 Totals 45 Weighted Average Invenotry on Hand Cost of Goods Sold Cost # of Units Cost of Per sold Goods Sold Unit cost of Goods Available for sales # of Units Cost Per Unit 18 27 Purchases Dec-07 Dec-14 Dec-21 Avaiable For sales December Sales Total 15 30 25 70 25 45 32 26.86 26.86 270 810 800 1880 672 1209 672

Periodic : Specific Identification Goods Purchasd Cost of Goods Sold Inventory Balance cost of Goods Available # of Units Cost Per Cost of # of Cost Per Ending # of Units Cost Per Unit for sales sold Unit Goods Sold Units Unit Inventory Purchases Dec-07 15 18 270 12 18 3 18 54 Dec-14 30 27 810 13 27 351 17 27 459 Dec-21 25 32 800 0 32 0 25 32 800 Totals 70 1880 25 567 45 216 1313