Question

Tipton Processing maintains its internal inventory records using average cost under a perpetual inventory system. The following information relates to its inventory during the year: Jan. 1 Inventory on hand–92,000 units; cost $4.00 each. Feb. 14 Purchased 108,000 units for $5.00 each. Mar. 5 Sold 162,000 units for $14.00 each. Aug. 27 Purchased 62,000 units for $6.00 each. Sep. 12 Sold 72,000 units for $14.00 each. Dec. 31 Inventory on hand–28,000 units. Required: 1. Determine the amount Tipton would calculate internally for ending inventory and cost of goods sold using average cost under a perpetual inventory system. 2. Determine the amount Tipton would report externally for ending inventory and cost of goods sold using last-in, first-out (LIFO) under a periodic inventory system. 3. Determine the amount Tipton would report for its LIFO reserve at the end of the year. 4. Record the year-end adjusting entry for the LIFO reserve, assuming the balance at the beginning of the year was $9,200. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the amount Tipton would report externally for ending inventory and cost of goods sold using last-in, first-out (LIFO) under a periodic inventory system. (Round "Cost per Unit" to 2 decimal places.) LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Cost Cost of Goods # of units Cost per Cost of # of units sold Sale unit Goods Sold 92,000 $ 4.00 $ 368,000 $ 4.00 Ending Inventory - Periodic LIFO # of units Cost per Ending in unit Inventory per unit Available for inventory $ 4.00 Beginning Inventory Purchases Feb. 14 Aug. 27 Total $ $ 108,000 $ 5.00 62,000 $ 6.00 262,000 540,000 372,000 5.00 6.00 5.00 6.00 $ $ 1,280,000 0 0 0 0 0

Answer 1

Requirement 2:

LIFO	Cost of goods available for sale			Cost of goods sold			Ending Inventory
Beginning Inventory	92,000	$                 4.00	$         3,68,000	64,000	$            4.00	$      2,56,000	28,000	$        4.00	$   1,12,000
Purchases:
Feb-14	1,08,000	$                 5.00	$         5,40,000	1,08,000	$            5.00	$      5,40,000	-	$        5.00	$                -
Aug-27	62,000	$                 6.00	$         3,72,000	62,000	$            6.00	$      3,72,000	-	$        6.00	$                -
	2,62,000		$      12,80,000	2,34,000		$    11,68,000	28,000		$   1,12,000