Question

Using the information below for questions 4 and 5. In the month of May 2017, Giffin Company made three purchases of merchandise in the following sequence: May 1 - 300 units at $6 May 10 - 400 units at $8 May 21 - 500 units at $9 4. Assuming there are 200 units on hand at the end of the period, compute the cost of goods sold and the ending inventory under the FIFO method. 5. Assuming there are 200 units on hand at the end of the period, compute the cost of goods sold and the ending inventory under the LIFO method.

Answer 1

4	Ending inventory of 200 units under FIFO method shall be from the lot purchases made
	on May 21 of 500 units @ $9
	Ending Inventory =200 units*$9 =$1,800
	Cost of goods sold =Opening inventory + Purchases - Ending inventory
	Cost of goods sold = 0 + $9,500 - $1,800 =$7,700
5	Ending inventory of 200 units under LIFO method shall be from the lot purchases made
	on May 1 of 300 units @ $6
	Ending Inventory =200 units*$6 =$1,200
	Cost of goods sold =Opening inventory + Purchases - Ending inventory
	Cost of goods sold = 0 + $9,500 - $1,200 =$8,300