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enow.com/ilm/takeAssignment/takeAssignmentMaindo?invoker assignments&itakeAssignmentSessionlocator-assignment-take;&inprogress; -false eBook Show Me How Calculator FIFO and LIFO Costs Under Perpetual Inventory System The following units of an item were available for sale during the year: Beginning inventory Sale First purchase Sale Second purchase Sale The firm uses the perpetual inventory system, and there are 19 units of the item on hand at the end of the year. a. What is the total cost of the ending inventory according to FIFO? 20 units at $48 13 units at $67 22 units at $49 14 units at $68 11 units at $51 7 units at $68 . What s he total cost of the ending inventory according to LFoExplanation / Answer
Perpetual Inventory Method
FIFO
Purchases
Sales
Balance
Units
Rate
Amount
Units
Rate
Amount
Units
Rate
Amount
20
$ 48.00
$ 960.00
Sale
13
$ 48.00
$ 624.00
7
$ 48.00
$ 336.00
First Purchase
22
$ 49.00
$ 1,078.00
7
$ 48.00
$ 336.00
22
$ 49.00
$ 1,078.00
Sales
7
$ 48.00
$ 336.00
$ -
7
$ 49.00
$ 343.00
15
$ 49.00
$ 735.00
Second Purchase
11
$ 51.00
$ 561.00
15
$ 49.00
$ 735.00
11
$ 51.00
$ 561.00
Sale
7
$ 49.00
$ 343.00
8
$ 49.00
$ 392.00
11
$ 51.00
$ 561.00
Total
33
$ 1,639.00
34
$ 1,646.00
19
$ 953.00
Closing Inventory as per FIFO
Opening stock Value
$ 960.00
Purchases
$ 1,639.00
Less: Cost of sales
$ 1,646.00
Closing Inventory
$ 953.00
LIFO
Purchases
Sales
Balance
Units
Rate
Amount
Units
Rate
Amount
Units
Rate
Amount
20
$ 48.00
$ 960.00
Sale
13
$ 48.00
$ 624.00
7
$ 48.00
$ 336.00
First Purchase
22
$ 49.00
$ 1,078.00
7
$ 48.00
$ 336.00
22
$ 49.00
$ 1,078.00
Sales
14
$ 49.00
$ 686.00
7
$ 48.00
$ 336.00
8
$ 49.00
$ 392.00
Second Purchase
11
$ 51.00
$ 561.00
7
$ 48.00
$ 336.00
8
$ 49.00
$ 392.00
11
$ 51.00
$ 561.00
Sale
7
$ 51.00
$ 357.00
7
$ 48.00
$ 336.00
8
$ 49.00
$ 392.00
4
$ 51.00
$ 204.00
Total
33
$ 1,639.00
34
$ 1,667.00
19
$ 932.00
Calculation of Closing Inventory
Opening Stock Value
$ 960.00
Purchases
$ 1,639.00
Less: Cost of sales
$ 1,667.00
Closing Inventory
$ 932.00
Answer a
Cost of Ending Inventory According to FIFO is $953.
Answer b
Cost of Ending Inventory According to LIFO is $932.
FIFO
Purchases
Sales
Balance
Units
Rate
Amount
Units
Rate
Amount
Units
Rate
Amount
20
$ 48.00
$ 960.00
Sale
13
$ 48.00
$ 624.00
7
$ 48.00
$ 336.00
First Purchase
22
$ 49.00
$ 1,078.00
7
$ 48.00
$ 336.00
22
$ 49.00
$ 1,078.00
Sales
7
$ 48.00
$ 336.00
$ -
7
$ 49.00
$ 343.00
15
$ 49.00
$ 735.00
Second Purchase
11
$ 51.00
$ 561.00
15
$ 49.00
$ 735.00
11
$ 51.00
$ 561.00
Sale
7
$ 49.00
$ 343.00
8
$ 49.00
$ 392.00
11
$ 51.00
$ 561.00
Total
33
$ 1,639.00
34
$ 1,646.00
19
$ 953.00
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