Altira Corporation uses a periodic inventory system. The following information r

Question

Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2013 is available:

Determine the inventory balance Altira would report in its August 31, 2013, balance sheet and the cost of goods sold it would report in its August 2013 income statement using each of the following cost flow methods:

Aug.1     Inventory on hand—3,000 units; cost $6.50 each. 8     Purchased 12,000 units for $5.7 each. 14     Sold 9,000 units for $12.2 each. 18     Purchased 7,000 units for $5.2 each. 25     Sold 8,000 units for $11.2 each. 31     Inventory on hand—5,000 units.

Explanation / Answer

FIFO Cost of goods available for sale Cost of goods sold-Periodic FIFO Ending inventory-Periodic FIFO # of units Cost per unit Cost of goods available for sale # of units Cost per unit Cost of goods sold # of units Cost per unit Ending inventory Beginning Inventory 3,000.00 6.50 19,500.00 August 08' 12,000.00 5.70 68,400.00 August 14' 3,000.00 6.50 19,500.00 6,000.00 5.70 34,200.00 August 18' 7,000.00 5.20 36,400.00 August 25' 6,000.00 5.70 34,200.00 2,000.00 5.20 10,400.00 Total 22,000.00 124,300.00 17,000.00 98,300.00 5,000.00          5.20        26,000.00 LIFO Cost of goods available for sale Cost of goods sold-Periodic FIFO Ending inventory-Periodic FIFO # of units Cost per unit Cost of goods available for sale # of units Cost per unit Cost of goods sold # of units Cost per unit Ending inventory Beginning Inventory 3,000.00 6.50 19,500.00 August 08' 12,000.00 5.70 68,400.00 August 14' 7,000.00 5.20 36,400.00 2,000.00 5.70 11,400.00 August 18' 7,000.00 5.20 36,400.00 August 25' 8,000.00 5.70 45,600.00 Aug 31' 2,000.00 5.70 11,400.00 3,000.00 6.50 19,500.00 Total 22,000.00 124,300.00 17,000.00 93,400.00 5,000.00 30,900.00 Weighted Average cost: Cost of goods available for sale Cost of goods sold Ending inventory # of units Cost per unit Cost of goods available for sale # of units Cost per unit Cost of goods sold # of units Cost per unit Ending inventory Beginning Inventory 3,000.00 6.50 19,500.00 August 08' 12,000.00 5.70 68,400.00 August 14' 7,000.00 5.65 39,550.00 2,000.00 5.65 11,300.00 August 18' 7,000.00 5.20 36,400.00 August 25' 8,000.00 5.65 45,200.00 Aug 31' Total 22,000.00 124,300.00 17,000.00 96,050.00 5,000.00 5.65        28,250.00 Total Cost    124,300.00 Total Unit      22,000.00 Total Weighted averge cost per unit                 5.65

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