Question

FIFO and LIFO Costs Under Perpetual Inventory System

The following units of an item were available for sale during the year:

Beginning inventory	31 units at $44
Sale	23 units at $66
First purchase	24 units at $47
Sale	17 units at $66
Second purchase	30 units at $49
Sale	19 units at $68

The firm uses the perpetual inventory system, and there are 26 units of the item on hand at the end of the year.

a. What is the total cost of the ending inventory according to FIFO?
$

b. What is the total cost of the ending inventory according to LIFO?
$

Answer 1

Answer to Part a. Purchases Perpetual First-in first-out method Sales Cost per Total Units unit Balance Date Cost per Cost per Units | Total Units Total unit unit 31 44 Beg Bal. Sales Ist Purchase 23 44 1,012 8 44 1,364 352 352 1,128 24 47 1,128 B 44 24 47 Sales 8 44 352 423 9 47 15 47 47 2nd Purchase 30 49 1,470 15 705 705 1,470 30 19 Sales 15 47 49 4 705 196 2,688 26 49 1,274 1,274 End. Bal. 59 26 49

Answer to Part b. Perpetual Last-in first-out method Sales Purchases Balance Date Cost per Cost per Cost per Units Total Units Total Units Total unit unit unit 44 Beg Bal. Sales Ist Purchase 31 8 23 44 1,012 44 24 47 1,128 00 44 47 24 Sales 00 44 17 47 799 2nd Purchase 30 49 1,470 7 8 7 30 8 7 11 47 44 47 49 44 47 49 1,364 352 352 1,128 352 329 352 329 1,470 352 329 539 1,220 Sales 49 19 59 931 2,742 End. Bal. 26