Question

LIFO was designed to protect cash flow in industries where prices increase rapidly. It has been used for both tax and financial statement reporting since the 1930s. The higher cost of goods sold under LIFO in these circumstances results in lower reported profit than under FIFO. In the 2012 budget, President Obama has threatened to repeal LIFO. If Exxon uses FIFO for its inventory valuation, calculate the cost of ending inventory and cost of goods sold if ending inventory is 100 barrels of crude oil:

Beginning inventory and purchases	Barrels			Barrel cost			Total cost
January 1		116		$	95		$	11,020
March 1		41			101			4,141
June 1		56			98			5,488
September 1		66			90			5,940
December 1		41			103			4,223
		320					$	30,812

Cost of ending inventory	$
Cost of goods sold	$

Answer 1

Answer:- FIFO method :- Available barrels for sale E 320 barels Ending inventory barrels = 100 barrels i barrels sold = 320 100 220 barrels sold. i cost of goods solda (116 X $95)+(41 x $101)+(56X $98).+ (9X $90) $ 21,279. cost of Ending mventony = 66- 1)$90 + (41 x $103) = $ 5310 + $ 4223 = $9533 = * = si cost of Ending inventory = $9533 cost of goods sold = $21,279