Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an it

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Periodic Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:  

Jan 1. Inventory- 42 units at $720
Mar 19. Purchase- 58 units at $780
Aug 30.n Purchase- 20 units at $816
Dec 12. Purchase- 30 units at $840

There are 48 units of the item in the physical inventory at December 31. The periodic inventory system is used.  

Determine the inventory cost and the cost of merchandise sold by three methods.

First-in, first-out (FIFO) :
Merchandise Inventory=
Merchandise Sold=

Last-in, first-out (LIFO) :
Merchandise Inventory=
Merchandise Sold=

Weighted average cost :
Merchandise Inventory=
Merchandise Sold=

Explanation / Answer

FIFO

Merchandise inventory: [18units x $816] + [30 units x $840] = $14,688 + $25,200 = $39,888

Medchandise Sold: [42 units x $720] + [58 units x $780] + [2 units x $816] = $30,240 + $45,240 + $1,632 = $77,112

LIFO

Merchandise inventory: [42 units x $720] + [6 x $780] = $30,240 + $4,680 = $34,920

Medchandise Sold: [52 units x $780] + [20 x $816] + [30 x $840] = $16,320 + $40,560 + $25,200 = $82,080

Weighted Avg Cost

[42 units x $720] + [58 units x $780] + [20 units x $816] + [30 x $840] = $117,000

$117,000 / 150 units = $780 / unit

Merchandise inventory: $780 * 48 units = $37,440

Inventory sold: $780 * 102 units = $79,560

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