Question

The following information is available from the Albany State Company inventory records for Product XYZ for the month of October 2019 C. Inventory Methods Unit Cost $10 auUnits 1,000 Beginning Inventory (Oct. 01) Purchases and sales: October 03 October 08 October 16 October 25 October 29 11 2,000 1,200 2,500 2,000 1,000 (elo 12 laA Sold Sold 13 0.020l62 What is the value of the ending inventory and cost of goods sold at October 31 under the perpetual inventory system for each of the following allocation methods? 1. First-In, First-Out (FIFO): Inventory Cost of Goods Sold 1,000 2,000 1200 2500 2,000 1,006 3,3 00 bni2300 unts Oct 2 27.600 2500 Oct 2942,a00m 2. Last-In, First-Out (LIFO): Inventory Cost of Goods Sold 000

Answer 1

Ans. 1	Perpetual FIFO:
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Oct	1000	$10.00	$10,000				1000	$10.00	$10,000
	3-Oct	2000	$11.00	$22,000				1000	$10.00	$10,000
								2000	$11.00	$22,000
	8-Oct				1000	$10.00	$10,000
					200	$11.00	$2,200	1800	$11.00	$19,800
	16-Oct	2500	$12.00	$30,000				1800	$11.00	$19,800
								2500	$12.00	$30,000
	25-Oct				1800	$11.00	$19,800
					200	$12.00	$2,400	2300	$12.00	$27,600
	29-Oct	1000	$13.00	$13,000				2300	$12.00	$27,600
								1000	$13.00	$13,000
	Total				Cost of goods sold		$34,400	Ending inventory		$40,600
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. 2	Perpetual LIFO:
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Oct	1000	$10.00	$10,000				1000	$10.00	$10,000
	3-Oct	2000	$11.00	$22,000				1000	$10.00	$10,000
								2000	$11.00	$22,000
	8-Oct				1200	$11.00	$13,200	1000	$10.00	$10,000
								800	$11.00	$8,800
	16-Oct	2500	$12.00	$30,000				1000	$10.00	$10,000
								800	$11.00	$8,800
								2500	$12.00	$30,000
	25-Oct				2000	$12.00	$24,000	1000	$10.00	$10,000
								800	$11.00	$8,800
								500	$12.00	$6,000
	29-Oct	1000	$13.00	$13,000				1000	$10.00	$10,000
								800	$11.00	$8,800
								500	$12.00	$6,000
								1000	$13.00	$13,000
	Total				Cost of goods sold		$37,200	Ending inventory		$37,800
	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.