Pearl Corp. sells a snowboard, EZslide, that is popular with snowboard enthusias

Question

Pearl Corp. sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Pearl Corp.'s purchases of EZslide snowboards during September. During the same month, 107 EZslide snowboards were sold. Pearl Corp. uses a periodic inventory system. Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.) Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods. (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.)

Explanation / Answer

A.Inventory under FIFO means inventory shall be valued on a first in first out basis. Inventory shall be valued as follow;

107 sold unit comprises of( 13 + 46 + 48) and remaining units shall be ending inventory ; ( 53-48 × 108 + 19 × 109) = $2611

Inventory valuation under LIFO shall be last in first out.Accordingly ending inventory shal be comprises of last purchases units shall be sold first and remaining units considered as inventory shall be beginning purchased units.

Hence sold units shall be (19 + 53 + 46- 11)

And inventory shall be( 46-35 × 107 + 13 × 104) = $2529

B.cost of goods aa computed above shall be=

Under FIFO ;13 × 104 + 46 × 107+ 48×108 = $11458

Under LIFO ;; 19 × 109+ 53 × 108+ 35 × 107 = $11540

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