Question

Data Table Date Item Quantity Unit Cost 145 310 Oct 1 Balance 5 Sale 7 12 Purchase 20$ 295 21 Sale 30 Sale Print Done

Answer 1

Correct Answer:

Cost of goods sold: (FIFO) $      6,995.00

Cost of goods sold: (LIFO) $ 6890.00

FIFO will result in higher cost of goods sold.

In times of decreasing inventory prices, as in the case here, the method in the higher cost of goods sold is FIFO.

Working:

Perpetual FIFO
Date	Goods Purchased			Cost of Goods Sold			Inventory Balance
	# of Units	Cost Per Unit	Cost of Goods Available for sale	# of Units Sold	Cost per Unit	Cost of Goods Sold	# of Units	Cost per Unit	Inventory Balance
01-Oct							14	$        310.00	$       4,340.00
05-Oct				7	$ 310.00	$      2,170.00	7	$        310.00	$       2,170.00
12-Oct	20	$ 295.00	$         5,900.00				7	$        310.00	$       2,170.00
							20	$        295.00	$       5,900.00
21-Oct				7	$ 310.00	$      2,170.00
				4	$ 295.00	$      1,180.00	16	$        295.00	$       4,720.00
						$                   -			$                    -
30-Oct				5	$ 295.00	$      1,475.00	11	$        295.00	$       3,245.00
Totals	20		$         5,900.00	23		$      6,995.00	11		$       3,245.00

Perpetual LIFO
Date	Goods Purchased			Cost of Goods Sold			Inventory Balance
	# of Units	Cost Per Unit	Cost of Goods Available for sale	# of Units Sold	Cost per Unit	Cost of Goods Sold	# of Units	Cost per Unit	Inventory Balance
01-Oct							14	$        310.00	$       4,340.00
05-Oct				7	$ 310.00	$      2,170.00	7	$        310.00	$       2,170.00
12-Oct	20	$            295.00	$         5,900.00				7	$        310.00	$       2,170.00
							20	$        295.00	$       5,900.00
21-Oct				11	$ 295.00	$      3,245.00	7	$        310.00	$       2,170.00
							9	$        295.00	$       2,655.00
30-Oct				5	$ 295.00	$      1,475.00	7	$        310.00	$       2,170.00
							4	$        295.00	$       1,180.00
Totals	20		$         5,900.00	23		$      6,890.00	11		$       3,350.00

End of answer.

Please give a thumbs-up, it will be highly appreciated.

Thanks