Question

Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 20 units at $360 $7,200 Aug. 13 Purchase 260 units at $342 88,920 Nov. 30 Purchase 40 units at $357 14,280 Available for sale 320 units $110,400 There are 57 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method. a. First-in, first-out (FIFO) method $ b. Last-in, first-out (LIFO) method $ c. Weighted average cost method $

Answer 1

FIFO = $20,094.00

LIFO = $19,854.00

Weighted average cost = $19,665.00

Step-by-step explanation:

a. The computation of first-in, first-out (FIFO) method is shown below:-

Details Units Cost Per Unit Total Cost

Jan-01 Opening

Inventory 20.00 $360.00 $7,200.00

Aug-13 Purchase 260.00 $342.00 $88,920.00

Nov-13 Purchase 40.00 $357.00 $14,280.00

Sales 303.00

Dec-13 Closing Stock

Aug-13 Lot 17.00 $342.00 $5,814.00

Dec-13 Closing Stock

Nov-13 Lot 40.00 $357.00 $14,280.00

Total Closing Stock Valuation under FIFO $20,094.00

b. The computation of last-in, first-out (LIFO) method is shown below:-

Details Units Cost Per Unit Total Cost

Jan-01 Opening

Inventory 20.00 $360.00 $7,200.00

Aug-13 Purchase 260.00 $342.00 $88,920.00

Nov-13 Purchase 40.00 $357.00 $14,280.00

Sales $283.00

Dec-13 Closing Stock

Aug-13 Lot 37.00 $342.00 $12,654.00

Dec-13 Closing Stock

Jan-01 Lot 20.00 $360.00 $7,200.00

Total Closing Stock Valuation under LIFO $19,854.00

c. The computation of Weighted average cost method is shown below:-

Details Units Cost Per Unit Total Cost

Jan-01 Opening

Inventory 20.00 $360.00 $7,200.00

Aug-13 Purchase 260.00 $342.00 $88,920.00

Nov-13 Purchase 40.00 $357.00 $14,280.00

Weighted

Average Cost 320.00 $345.00 $1,10,400.00

Sales $283.00

Dec-13 Closing Stock

Aug-13 Lot 57.00 $345.00 $19,665.00