Problem

Cost-flow assumptions—FIFO, LIFO, and weighted average using a periodic system The followi...

Cost-flow assumptions—FIFO, LIFO, and weighted average using a periodic system The following data are available for Sellco for the fiscal year ended on January 31, 2011:

Sales 

1,600 units

Beginning inventory 

500 units @ $4

Purchases, in chronological order 

600 units @ $5

 

800 units @ $6

 

400 units @ $8

Required

a. Calculate cost of goods sold and ending inventory under the following cost-flow assumptions (using a periodic inventory system):

1. FIFO.

2. LIFO.

Weighted average. Round the unit cost answer to two decimal places and ending inventory to the nearest $10.


b. Assume that net income using the weighted-average cost-flow assumption is $58,000. Calculate net income under FIFO and LIFO.

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