Question

odic system The following data are available for Sellco for the fiscal year ended on Cost flow assumptions-FIFO, LIFO, and weighted average using a per Problem answer W sumption January 31, 2020: 0 7.5 Sales Beginning inventory Purchases, in chronological order 1.600 units 500 units a $4 600 units @ $5 800 units @ $6 500 units @ $8 Required: a. Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system): 1. FIFO. 2. LIFO. 3. Weighted average. Round the unit cost answer to two decimal places and ending inventory to the nearest $10. Assume that net income using the weighted-average cost flow assumption is $80,000. Calculate net income under FIFO and LIFO.

Answer 1

	Unit	Unit Cost	Total Cost
Beginning Inventory	500	4	2000
Purchase 1	600	5	3000
Purchase 2	800	6	4800
Purchase 3	500	8	4000
Total	2400		13800

Calculate following

	FIFO	LIFO	Weighted average
Cost of goods sold	13800-5800 = 8000	13800-3500 = 10300	9200
Ending inventory	4000+300*6 = 5800	2000+300*5 = 3500	13800/2400*800 = 4600

Calculate net income under FIFO and LIFO

	FIFO	LIFO
Net income	80000+1200 = 81200	80000-1100 = 78900