In its first month of operations , Weatherall company made three purchases of me

Question

In its first month of operations , Weatherall company made three purchases of merchandise in the following sequence : (1) 130 units at $ 7, (2) 460 units at $8, and (3) 100 units at $9, Assuming there are 340 units on hand , compute the cost of the ending inventory under FIFO method and LIFO method . Weatherall uses a periodic inventory system . In its first month of operations , Weatherall company made three purchases of merchandise in the following sequence : (1) 130 units at $ 7, (2) 460 units at $8, and (3) 100 units at $9, Assuming there are 340 units on hand , compute the cost of the ending inventory under FIFO method and LIFO method . Weatherall uses a periodic inventory system .

Explanation / Answer

Purchases: 130 x 7 = 910

460 x 8 = 3680

100 x 9 = 900

690 $ 5,490

Inventory = 340

Sales = 350

FIFO = (210 x 8) + (130 x 7) = $2,590

LIFO = (240 x 8) + (100 x 9) = $2,20

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