Periodic Inventory by Three Methods Pappa\'s Appliances uses the periodic invent

Question

Periodic Inventory by Three Methods

Pappa's Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, 2016, purchases invoices during the year, and the inventory count at December 31, 2016, are summarized as follows:

Required:

1. Determine the cost of the inventory on December 31, 2016, by the first-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the units PURCHASED MOST RECENTLY first.

2. Determine the cost of the inventory on December 31, 2016, by the last-in, first-out method.

If the inventory of a particular model comprises one entire purchase plus a portion of another purchase acquired at a different unit cost, use a separate line for each purchase. If units are in inventory at two different costs, enter the OLDEST units first.

3. Determine the cost of the inventory on December 31, 2016, by the weighted average cost method.

4. would be preferred for income tax purposes in periods of declining prices. fifo or lifo

Purchases Invoices
Model Inventory,
January 1
   1st
   2nd
   3rd    Inventory Count,
December 31 C55 3 at $ 1,040 3 at $ 1,054 3 at $ 1,060 3 at $ 1,070 4 D11 9 at $ 639 7 at 645 6 at 666 6 at 675 11 F32 5 at 240 3 at 260 1 at 260 1 at 280 2 H29 6 at 305 3 at 310 3 at 316 4 at 317 4 K47 6 at 520 8 at 531 4 at 549 6 at 542 8 S33 — 4 at 222 4 at 232 — 2 X74 4 at 35 6 at 36 8 at 37 7 at 39 7

Explanation / Answer

Req 1: FIFO Model Quantity Unit Cost Total Cost C55 3 1070 3210 c55 1 1060 1060 D11 6 675 4050 D11 5 666 3330 F32 1 280 280 F32 1 260 260 H29 4 317 1268 K47 6 542 3252 K47 2 549 1098 S33 2 232 464 X74 7 39 273 TOTAL 18545 Req 2: LIFO Model Quantity Unit Cost Total Cost C55 3 1040 3120 c55 1 1054 1054 D11 9 639 5751 D11 2 645 1290 F32 2 240 480 H29 4 305 1220 K47 6 520 3120 K47 2 531 1062 S33 2 222 444 X74 4 35 140 X74 3 36 108 TOTAL 17789 Req 3: Weighted Average Model Quantity Unit Cost Total Cost C55 4 1056 4224 D11 11 654 7194 F32 2 252 504 H29 4 311 1244 K47 8 534 4272 S33 2 227 454 X74 7 37 259 TOTAL 18151

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