Question

Penn Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units 2.700 Unit Cost $8.50 Inventory, December 31, prior year For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current year 5,700 3,700 6,100 9.50 4.00 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Do not round "Average cost per unit" and round your final answers to nearest whole dollar amount.) FIFO LIFO Average Cost Ending inventory Cost of goods sold

Answer 1

Answers

	FIFO	LIFO	Weighted Average
Ending Inventory	$    37,600.00	$            55,250.00	$               46,330
Cost of Goods Sold	$    54,300.00	$            36,650.00	$               45,570

• Workings

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	2700	$                   8.50	$                      22,950.00	2700	$                 8.50	$               22,950.00	0	$                   8.50	$                         -
Purchases:
21-Mar	5700	$                   9.50	$                      54,150.00	3300	$                 9.50	$               31,350.00	2400	$                   9.50	$          22,800.00
01-Aug	3700	$                   4.00	$                      14,800.00	0	$                 4.00	$                              -	3700	$                   4.00	$          14,800.00
TOTAL	12100		$                      91,900.00	6000		$               54,300.00	6100		$          37,600.00
LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	2700	$                   8.50	$                      22,950.00	0	$                 8.50	$                              -	2700	$                   8.50	$          22,950.00
Purchases:
21-Mar	5700	$                   9.50	$                      54,150.00	2300	$                 9.50	$               21,850.00	3400	$                   9.50	$          32,300.00
01-Aug	3700	$                   4.00	$                      14,800.00	3700	$                 4.00	$               14,800.00	0	$                   4.00	$                         -
TOTAL	12100		$                      91,900.00	6000		$               36,650.00	6100		$          55,250.00
Average Method	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	2700	$                   8.50	$                      22,950.00
Purchases:
21-Mar	5700	$                   9.50	$                      54,150.00
01-Aug	3700	$                   4.00	$                      14,800.00
TOTAL	12100	$                7.595	$                      91,900.00	6000	$             7.5950	$               45,570.25	6100	$              7.5950	$          46,329.75