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Question

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

There are 36 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.

Cost Inventory Method Merchandise Inventory Merchandise Sold FIFO $ $ LIFO $ $ Average Cost $ $

Explanation / Answer

Answer: According to FIFO:

According to LIFO:

According to Average cost:

Purchase COGS Balance Date Particulars Units Rate Amount ($) Date Particulars Units Rate Amount ($) Date Particulars Units Rate Amount ($) 1-Jan Opening 42 60 2520 10-Mar purchase 58 65 3770 30-Aug purchase 20 68 1360 Issue 42 60 2520 12-Dec purchase 30 70 2100 58 65 3770 31-Dec Balance 6 68 408 14 68 952 30 70 2100 114 7242 36 2508

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