E 8-17 (FIFO and LIFO—Periodic and Perpetual) The following is a record of Pervi
ID: 2386956 • Letter: E
Question
E 8-17(FIFO and LIFO—Periodic and Perpetual) The following is a record of Pervis Ellison Company's transactions for Boston Teapots for the month of May 2012.
May 1 Balance 400 units @ $20 ---- May 10 Sale 300 units @ $38
12 Purchase 600 units @ $25 ---- 20 Sale 590@ $38
28 Purchase 400 units @ $30 ----
Instructions
(A) Assuming that perpetual inventories are not maintained and that a physical count at the end of the month shows 560 units on hand, what is the cost of the ending inventory using (1) FIFO and (2) LIFO?
(B) Assuming that perpetual records are maintained and they tie into the general ledger, calculate the ending inventory using (1) FIFO and (2) LIFO.
Explanation / Answer
(a) (1) 400 @ $30 = $12,000
160 @ $25 = 4,000
$16,000
(2) 400 @ $20 = $ 8,000
160 @ $25 = 4,000
$12,000
(b) (1) FIFO $16,000 [same as (a)]
(2) LIFO 400 @ $30 = $12,000
60 @ $25 = 1,500
100 @ $20 = 2,000
$15,500
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