Assume that a retailer’s beginning inventory and purchases of a popular item dur

Question

Assume that a retailer’s beginning inventory and purchases of a popular item during January included: (1) 340 units at $7.4 in beginning inventory on January 1, (2) 490 units at $8.4 purchased on January 8, and (3) 790 units at $9.4 purchased on January 29. The company sold 390 units on January 12 and 590 units on January 30. Calculate the cost of goods sold for the month of January under (a) FIFO (periodic calculation), (b) FIFO (perpetual calculation), (c) LIFO (periodic calculation), and (d) LIFO (perpetual calculation).

Explanation / Answer

Solution.

(a) FIFO (periodic calculation)

(c) LIFO (periodic calculation),

B.(b) FIFO (perpetual calculation)

D. LIFO (perpetual calculation).

Date Unit Rate Amount 1-Jan 340 7.4                       2,516.00 8-Jan 490 8.4                       4,116.00 29-Jan 150 9.4                       1,410.00 C.O.G.S 980                       8,042.00

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