Purchases Sales Compute the inventory at April 30 on each of the following bases

Question

Purchases

Sales

Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost. (Round final answers to 0 decimal places, e.g. $6,548.)

Hull Company’s record of transactions concerning part X for the month of April was as follows.

Purchases

Sales

April 1 (balance on hand) 530 @ $5.30 April 5 730 4 830 @ 5.40 12 630 11 730 @ 5.70 27 1,660 18 630 @ 5.70 28 150 26 1,030 @ 6.00 30 630 @ 6.20

Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost. (Round final answers to 0 decimal places, e.g. $6,548.)

Explanation / Answer

Computation of inventory under FIFO method :

= ((630 * 6.20) + (580 * 6))

= 3906 + 3480

= 7,386

Computation of inventory under LIFO method :

= ((530 * 5.3) + (50 * 5.4) + (630 * 6.2))

= 2809 + 270 + 3906

= 6985

Computation of inventory under Average cost method :

   = 1210 * (6.2 + 6.0) / 2

   = 7,381

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