Question

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Simple Plan Enterprisee uses a perlodic Inventory system. Its records showed the foliowng: Iriventory, Decenber 31, using FIFO 44 Units $19 $a38 Irivenlory, December 31, using LIFO44 Urits515 SBã0 Transaclions in the Folkowing Year Purchase, January 9 Purchase, January 20 Sale, January 11, at $43 per unit) Sale, Jauary 27(at $44 per unit Units Unil Cost Tolal Cast 56 $20 106 86 62 21 2,226 1. Compute the nunber and cost of goods available for sale, the cost of ending inventory, and the cost af goode soid under FIFO and LIFO FIFO LIFO Number of Goods Avalable tor Sale (Units》 Cost of Goods Avallable tor Sale Cost of Ending Inventory Cost of Goods Sold 2. Campule the invenlory lurrcer ralio under the: FIFO and LIFO invery cosling melhxls. (Round your answers to 2 decimal places. FIFO FO Inventory Turnaver Ratio 3. The inventory method used does make a significant difference in the inventory turnover ratio Yea No

Answer 1

	FIFO
		Units	Rate p.u ($)	Cost of Goods Available for Sale	Sold out of	Left in Ending Inventory	Cost of Inventory($)	Cost Of Goods Sold($)
		a	b	c	d	e=a+d	f=d*e	g=-d*b
	Beginning Inventory	44	$             19	$                 836	-44	0	$                       -	$                        836
	Jan, 9	56	$             20	$              1,120	-56	0	$                       -	$                     1,120
	Jan, 20	106	$             21	$              2,226	-48	58	$                  1,218	$                     1,008
	Closing Inventory	58
	Units Sold	148		$              4,182	-148	58	$                  1,218	$                     2,964
	LIFO
		Units	Rate p.u ($)	Cost of Goods Available for Sale	Sold out of	Left in Ending Inventory	Cost of Inventory($)	Cost Of Goods Sold($)
		a	b	c	d	e=a+d	f=d*e	g=-d*b
	Beginning Inventory	44	$             15	$                 660	-30	14	$                     210	$                        450
	Jan, 9	56	$             20	$              1,120	-56	0	$                       -	$                     1,120
	Jan, 20	106	$             21	$              2,226	-62	44	$                     924	$                     1,302
	Closing Inventory	58
	Units Sold	148		$              4,006	-148	58	$                  1,134	$                     2,872
1
		FIFO	LIFO
	Number of Goods Available for Sale	206	206
	Cost of Goods Available for Sale	$ 4,182	$        4,006
	Cost of Ending Inventory	$ 1,218	$        1,134
	Cost of Goods Sold	$ 2,964	$        2,872
2
			FIFO	LIFO
	Cost of Goods sold	a	$        2,964	$              2,872
	Beginning Inventory	b	$           836	$                 660
	Closing Inventory	c	$        1,218	$              1,134
	Average Inventory	d=b+c/2	$        1,027	$                 897
	Inventory Turnover Ratio	e=a/d	2.89	3.20