Question

The following transactions affected Alpenrose Corporation’s merchandise inventory during the month of March 2016: March 1 — Inventory on hand — 3,000 units; cost $8.00 each. March 8 — Purchased 5,000 units for $8.20 each on account. March 14 — Sold 4,000 units for $14.00 each on account. March 18 — Purchased 6,000 units for $8.40 each on account. March 25 — Sold 2,000 units for $14.00 each on account. March 31 — Inventory on hand — 8,000 units. Assume Alpenrose uses perpetual inventory system.

Determine the inventory balance Alpenrose would report on its March 31, 2016, balance sheet and the cost of goods sold it would report on its March 2016, income statement using each of the following cost flow methods: 1. First-in, first-out (FIFO) 2. Last-in, first-out (LIFO)

Answer 1