Question

Under the FIFO perpetual inventory system, given the information below, what would be January's Cost of Goods Sold be?
Under the LIFO perpetual inventory system, given the information below, what would be January's Ending Inventory value?

Date 1/1 1/5 Description Beginning Inventory Bought Inventory Sold Inventory Bought Inventory Sold Inventory Units Cost per Unit 150 10.00 75 12.00 130 ?? 100 8.00 60 ?? 1/16 1/20 1/28

please help walk me through this. im very confused but i want to understand. what is the FIFO perpetual inventory system or LIFO perpetual inventory system?

Answer 1

Ans. 1	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.

Perpetual FIFO: Purchase Rate Cost of goods sold Rate Quantity Total cost Quantity Total cost Date 1-Jan Description Beginning inventory Quantity 150 Balance Rate $10.00 Total cost $1,500 5-Jan First purchase 75 $12.00 $900 150 75 $10.00 $12.00 $1,500 $900 16-Jan Sale 130 $10.00 $1,300 20 75 $10.00 $12.00 $200 $900 20-Jan Second purchase 100 $8.00 $800 20 75 100 $10.00 $12.00 $8.00 $200 $900 $800 28-Jan Sale 20 40 $10.00 $12.00 $200 $480 35 $12.00 100 $8.00 Cost of Ending inventory $420 $800 $1,220 Total Cost of goods sold $1,980

Ans. 2	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.

Perpetual LIFO: Purchase Rate Cost of goods sold Rate Quantity Total cost Date 1-Jan Total cost Description Beginning inventory Quantity Quantity 150 Balance Rate $10.00 Total cost $1,500 5-Jan First purchase 75 $12.00 $900 150 75 $10.00 $12.00 $1,500 $900 16-Jan Sale 75 55 $12.00 $10.00 $900 $550 95 $10.00 $950 20-Jan Second purchase 100 $8.00 $800 95 100 $10.00 $8.00 $950 $800 28-Jan Sale 60 $8.00 $480 95 40 $10.00 $8.00 $950 $320 Total Cost of goods sold $1,930 Cost of Ending inventory $1,270