Question

Beginning inventory, purchases, and sales data for hammers are as follows:

Mar. 3 Inventory 12 units at $15
11 Purchase 13 units at $17
14 Sale 18 units
21 Purchase 9 units at $20
25 Sale 10 units
Assuming the business maintains a perpetual inventory system, complete the subsidiary inventory ledger and calculate the cost of merchandise sold and ending inventory under the following assumptions:
(a) First-in, first-out
Purchases Cost of Merchandise Sold Inventory
Date Qty Unit Total Qty Unit Total Qty Unit Total
Cost Cost Cost Cost Cost Cost
Mar. 3
11
14
21
25
Balances
Cost of merchandise sold $
Ending Inventory $
(b) Last-in, first-out
Purchases Cost of Merchandise Sold Inventory
Date Qty Unit Total Qty Unit Total Qty Unit Total
Cost Cost Cost Cost Cost Cost
Mar. 3
11
14
21
25
Balances
Cost of merchandise sold $
Ending Inventory $

Answer 1

a) under FIFO

COGS = $461

ending inventory = $120

b) under LIFO

COGS = $491

ending inventory = $90

Step-by-step explanation:

inventory:

March 3 Inventory 12 units at $15

March 11 Purchase 13 units at $17

March 14 Sale 18 units

March 21 Purchase 9 units at $20

March 25 Sale 10 units

under FIFO COGS:

March 14

Dr Cost of goods sold 282

Cr Merchandise inventory 282

March 25

Dr Cost of goods sold 179

Cr Merchandise inventory 179

under LIFO COGS:

March 14

Dr Cost of goods sold 296

Cr Merchandise inventory 296

March 25

Dr Cost of goods sold 195

Cr Merchandise inventory 195