Question

net income? E8.10 (L03) (FIFO and Average-Cost Inventory) Esplanade SA was formed on December 1, 2018 The following information is available from Esplanade's inventory records for Product BAP. Units 600 Unit Cost R$ 8.00 January 1, 2019 (beginning inventory) Purchases: January 5, 2019 January 25, 2019 February 16, 2019 March 26, 2019 1,100 1,300 800 600 9.00 10.00 11.00 12.00 my 600 A physical inventory on March 31, 2019, shows 1,500 units on hand. Instructions Assuming Esplanade uses a periodic system, prepare schedules to compute the ending inventory at March 31, 2019, under each of the following inventory methods (round to two decimal places). a. Specific identification. b. FIFO. C. Weighted average. Under (a). 400 units from the beginning inventory are on hand and 1.100 units from the January 5 pur- chase are on hand

Answer 1

a)

Specific Identification
	Units	Price	Amount
Beginning Inventory	400.00	8.00	3,200.00
Jan-05	1,100.00	9.00	9,900.00
Value of Ending Inventory			13,100.00

b)

FIFO
	Units	Price	Amount
Jan-25	100.00	10.00	1,000.00
Feb-16	800.00	11.00	8,800.00
Mar-26	600.00	12.00	7,200.00
Value of Ending Inventory			17,000.00

c)

	Units	Price	Amount
Beginning Inventory	600.00	8.00	4,800.00
Jan-05	1,100.00	9.00	9,900.00
Jan-25	1,300.00	10.00	13,000.00
Feb-16	800.00	11.00	8,800.00
Mar-26	600.00	12.00	7,200.00
	2,700.00		29,000.00

Weighted Average cost per unit = 29,000/2,700 = 10.74

Ending Inventory Value = 1.500 x 10.74 = 16,110