Question

Periodic inventory by three methods 

The beginning inventory for Midnight Supplies and data on purchases and sales for a three-month period are shown below:

Answer 1

Correct Answer:

	FIFO	LIFO	Weighted Average
Ending Inventory	$           1,010,625.00	$              881,250.00	$           2,305,845.00
Cost of Goods Sold	$         10,891,875.00	$        11,021,250.00	$           9,596,655.00

Working:

Cost of Goods Available for sale
		Units	Cost per unit	value
Beginning Inventory	01-Jan	7500	$                         75.00	$              562,500.00
Purchases	10-Jan	22500	$                         85.00	$           1,912,500.00
Purchases	10-Feb	54000	$                         87.50	$           4,725,000.00
Purchases Return	05-Mar	45000	$                         89.50	$           4,027,500.00
Purchases	25-Mar	7500	$                         90.00	$              675,000.00
Total		136500		$        11,902,500.00

	FIFO
A	Total Units Available for sale			136500		$               11,902,500.00
	Units Sold			125250
	Ending Inventory Units			11250
	Valuation
	Cost of Goods Sold		7500		$                         75.00	$                     562,500.00
			22500		$                         85.00	$                 1,912,500.00
			54000		$                         87.50	$                 4,725,000.00
			41250		$                         89.50	$                 3,691,875.00
B	Cost of Goods Sold		125250	units		$               10,891,875.00
A-B	Ending Inventory		11250	units		$                 1,010,625.00

	LIFO
A	Total Units Available for sale			136500		$               11,902,500.00
	Units Sold			125250
	Ending Inventory Units			11250
	Valuation
	Cost of Goods Sold		7500.00		$                         90.00	675,000.00
			45000.00		$                         89.50	4,027,500.00
			54000.00		$                         87.50	4,725,000.00
			18750.00		$                         85.00	1,593,750.00
						-
						-
B	Cost of Goods Sold		125250	units		$               11,021,250.00
A-B	Ending Inventory		11250	units		$                     881,250.00

Weighted Average Cost Per unit
Units		(A)	136500 Units
Total Cost		(B)	$        11,902,500.00
Average Cost		(C=B/A)	$                         87.20

	Weighted Average
A	Total Units Available for sale			136500		$               11,902,500.00
	Units Sold			125250
	Ending Inventory Units			11250
	Valuation
	Cost of Goods Sold		125250		$                         76.62	$                 9,596,655.00
						$                                      -
						$                                      -
						$                                      -
						$                                      -
						$                                      -
B	Cost of Goods Sold		125250	units		$                 9,596,655.00
A-B	Ending Inventory		11250	units		$                 2,305,845.00

End of answer.

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