Perpetual Method. Conid l Operating Expenses, Inventory Valuation, and Accounts

Question

Perpetual Method. Conid l Operating Expenses, Inventory Valuation, and Accounts Payable following inventory data for the first two months of the year for CompX Intermational: Unit Cost Total Units $2.00 $120,000 2.00 201 20 617.190 $944 390 60,000$2.00 Beginning inventory on hand 103,600 293,900 Purchases during month 2.10 January 5 457,500 Sales of inventory Beginning inventory at Purchases during month 383,900 January 25. February 1 February 8 73,600 282,200 153,500 509,300 . . . . 2.20 620,840 2.60 399,100 Sales of inventory 407,600 Ending Inventory 101,700 Required I. Calculate the cost of goods sold and ending inventory for January and February under each of the follow- ing methods, assuming use of a perpetual inventory management system: a. FIFO b. LIFO c. Weighted-average Assume that the replacement cost of CompX Intermational's ending inventory is $2.05 per unit on lan ary 30 and $2.35 per unit on February 28. Calculate the value of the ending inventory for Janiury 2. February under each of the following methods: a. FIFO b. LIFO c. Weighted-average 3. Which method FIFO, LIFO, or the weighted-average cost method-should CompX Inte when reporting its financial results to its shareholders? Why? How does this decision sont the

Explanation / Answer

PART-1)

January

February

COGS

Ending inventory

COGS

Ending inventory

FIFO

789,830

154,560

910,080

264,420

LIFO

797,190

147,200

958,120

209,020

Weighted average

792,462

151,928

937,863

234,005

PART-2)

January

February

FIFO

150,880

238,995

LIFO

147,200

209,020

Weighted average

150,880

243,005

January

February

COGS

Ending inventory

COGS

Ending inventory

FIFO

789,830

154,560

910,080

264,420

LIFO

797,190

147,200

958,120

209,020

Weighted average

792,462

151,928

937,863

234,005

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