The following is a record of Pervis Ellison Company’s transactions for Boston Te
ID: 2478154 • Letter: T
Question
The following is a record of Pervis Ellison Company’s transactions for Boston Teapots for the month of May 2014.May 1 Balance 432 units @ $21 May 10 Sale 324 units @ $36 12 Purchase 648 units @ $23 20 Sale 583 units @ $36 28 Purchase 432 units @ $29 The following is a record of Pervis Ellison Company’s transactions for Boston Teapots for the month of May 2014.
May 1 Balance 432 units @ $21 May 10 Sale 324 units @ $36 12 Purchase 648 units @ $23 20 Sale 583 units @ $36 28 Purchase 432 units @ $29 (1)
FIFO (2)
LIFO (1)
FIFO (2)
LIFO $ The following is a record of Pervis Ellison Company’s transactions for Boston Teapots for the month of May 2014.
May 1 Balance 432 units @ $21 May 10 Sale 324 units @ $36 12 Purchase 648 units @ $23 20 Sale 583 units @ $36 28 Purchase 432 units @ $29
Explanation / Answer
First part: Perpetual inventory method is NOT being used:
Value of ending inventory of 605 units under FIFO = value of 432 units purchased on May 28 + value of (605-432) units from the purchase of May 12 = 432 x $ 29 + 173 x $23 = $16507
Value of ending inventory of 605 units under LIFO = Value of 432 units from May 1 inventory + value of (605 - 432) units from May 12 purchase = 432 x $21 + 173 x $23 = $13051
Second part:
FIFO
Cost of ending Inventory = $16507
LIFO
Cost of ending inventory = $16291
Date Goods Purchased Cost of goods sold Inventory Balance No. Of units Cost perunit Total purchase price no. Of units cost per unit cost of goods sold no of units cost per unit ($) inventory balance May-01 432 @ 21.00 = 9072 May-10 324 @ 21 = 6804 108 @ 21.00 = 2268 Total & Balance 324 6804 108 2268 May-12 648 @ 23 14904 648 @ 23.00 = 14904 Total & Balance 648 14904 324 6804 756 17172 May-20 108 @ 21 = 2268 475 @ 23 = 10925 173 @ 23.00 = 3979 Total & Balance 648 14904 907 19997 173 3979 May-28 432 @ 29 12528 432 @ 29.00 = 12528 Total & Balance 1080 27432 907 19997 605 16507Related Questions
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