Question

TOITS Only product Units Acquired at Cost 215 units @ $14.99 = $3,010 Units sold at Retail 165 units @ $23.00 Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals 160 units @ $13.00 = 2,080 190 units @ $23.99 330 units @ $12.50 = 705 units 4,125 $9,215 355 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 350 units, where 330 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Exercise 5-3 Perpetual: Inventory costing methods LO P1 Required: 1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification. 2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average. 3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO. 4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

What is the Perpetual FIFO and LIFO?

Answer 1

Perpetual First In First Out method (FIFO) Cost of Goods sold Goods Purchases Inventory on Hand Date Qty Cost per unit # of units sold cost per unit Cost of Goods sold # of units Cost per Inventory unit Balance Jan-01 215 $ 14.00 $ 3,010.00 Jan-10 165 $ 14.00 $ 2,310.00 50 Jan-20 160 $ 13.00 50 $ 14.00 $ 700.00 $ 14.00 $ 700.00 $ 13.00 $ 2,080.00 160 Jan-25 50 $ $ 14.00 $ 700.00 13.00 $ 1,820.00 140 20 Jan-30 330 $ 12.50 20 $ 13.00 $ 260.00 $ 13.00 $ 260.00 $ 12.50 $ 4,125.00 $ 4,385.00 330 350 4,830.00 Totals Ending Inventory Cost of Goods sold 350 units 355 units $ $ 355 4,385 4,830 Perpetual Last In First Out method (LIFO) Goods Purchases Cost of Goods sold Cost per Cost of Qty # of units sold cost per unit unit Goods sold Date Inventory on Hand Cost per Inventory # of units unit Balance 215 $ 14.00 $ 3,010.00 Jan-01 165 $ 14.00 $ 2,310.00 50 Jan-10 Jan-20 160 $ 13.00 50 $ 14.00 $ 700.00 $ 14.00 $ 700.00 $ 13.00 $ 2,080.00 160 Jan-25 160 30 $ $ 13.00 14.00 20 Jan-30 330 $ 12.50 20 330 350 $ 14.00 $ 280.00 $ 14.00 $ 280.00 $ 12.50 $ 4,125.00 $ 4,405.00 2,310.00 Totals Ending Inventory Cost of Goods sold 350 units 355 units $ $ 355 4,405 2,310

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