Hanover Lighting had a beginning inventory of 15 units at a cost of $7 per unit
ID: 2498442 • Letter: H
Question
Hanover Lighting had a beginning inventory of 15 units at a cost of $7 per unit on August 1. During the month, the following purchases and sales were made.
Purchases Sales
August 5 20 units at $8 August 2 10 units
August 11 30 units at $9 August 10 15 units
August 23 25 units at $10 August 19 40 units
August 21 15 units
Hanover uses a periodic inventory system.
Instructions: Determine ending inventory and cost of goods sold under:
FIFO
LIFO
Explanation / Answer
FIFO Periodic: Units available for sale 90 (15+20+30+25) Units sold 80 (10+15+40+15) Units in ending inventory 10 Cost of goods sold units unit cost Total Sale from Aug 1 inventory 15 7 105 Sale from Aug 5 inventory 20 8 160 Sale from Aug 11 inventory 30 9 270 Sale from Aug 23 inventory 15 10 150 80 685 Ending inventory inventory from Aug 23 Purchase 10 10 100 LIFO Periodic Cost of goods sold units unit cost Total Sale from Aug 23 inventory 25 10 250 Sale from Aug 11 inventory 30 9 270 Sale from Aug 5 inventory 20 8 160 Sale from Aug 1 inventory 5 7 35 80 715 Ending inventory inventory from Aug 1 10 7 70
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