Problem

Comparing amounts for ending inventory—perpetual inventory—FIFO and LIFO [5-10 min]Assume...

Comparing amounts for ending inventory—perpetual inventory—FIFO and LIFO [5-10 min]

Assume that a Models and More store bought and sold a line of dolls during December as follows:

Beginning inventory......

  13   units @

$  11

Sale..............................

  9      units

 

Purchase......................

  17   units @

$  13

Sale..............................

  13   units

 

Models and More uses the perpetual inventory system.

Requirements

1. Compute the cost of ending inventory using FIFO.


2. Compute the cost of ending inventory using LIFO.


3. Which method results in a higher cost of ending inventory?

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