The following data regarding purchases and sales of a commodity were taken from
ID: 2544116 • Letter: T
Question
The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account: June 1 Balance 25 units at $60 6 Sale 20 units 8 Purchase 20 units at $61 16 Sale 10 units 20 Purchase 20 units at $62 23 Sale 25 units 30 Purchase 15 units at $63 Calculate the cost of the ending inventory at June 30, using (a) the first-in, first-out (FIFO) method and (b) the last-in, first-out (LIFO) method. Identify the quantity, unit price, and total cost of each lot in the inventory. (a) First-In, First-Out (FIFO): June 1 units at $ $ June 8 units at $ Total $ (b) Last-In, First-Out (LIFO): units at $ $ units at $ units at $ Total $
Explanation / Answer
Answer
FIFO
Opening + Purchases
Cost of Goods Sold
Closing Inventory
June 1 Balance
25
2.40
60
25
2.40
60.00
June 6 Sales
0
20
2.40
48
5
2.40
12.00
June 8 Purchases
20
3.05
61
5
2.40
12.00
20
3.05
61.00
June 16 Sale
5
2.40
12
15
3.05
45.75
5
3.05
15.25
June 20 Purchases
20
3.10
62
15
3.05
45.75
20
3.10
62.00
June 23 Sales
15
3.05
45.75
10
3.10
31.00
10
3.10
31
June 30 Purchases
15
4.20
63
10
$3.10
$31.00
15
$4.20
$63.00
TOTAL
80
$246
55
$152
25
$94
Cost of Ending Inventory = $94
Lot detail is in ‘bold’ and ‘underlined’ in Ending Inventory column.
LIFO
Opening + Purchases
Cost of Goods Sold
Closing Inventory
June 1 Balance
25
2.40
60
25
2.40
60.00
June 6 Sales
20
2.40
48
5
2.40
12.00
0.00
June 8 Purchases
20
3.05
61
5
2.40
12.00
20
3.05
61.00
June 16 Sale
10
3.05
30.5
5
2.40
12.00
10
3.05
30.50
June 20 Purchases
20
3.10
62
5
2.40
12.00
10
3.05
30.50
20
3.10
62.00
June 23 Sales
20
3.10
62
5
2.40
12.00
5
3.05
15.25
5
3.05
15.25
June 30 Purchases
15
4.20
63
5
$2.40
$12.00
5
$3.05
$15.25
15
$4.20
$63.00
TOTAL
80
$246.00
55
$155.75
25
$90.25
Cost of Ending Inventory = $90.25
Lot detail is in ‘bold’ and ‘underlined’ in Ending Inventory column.
FIFO
Opening + Purchases
Cost of Goods Sold
Closing Inventory
June 1 Balance
25
2.40
60
25
2.40
60.00
June 6 Sales
0
20
2.40
48
5
2.40
12.00
June 8 Purchases
20
3.05
61
5
2.40
12.00
20
3.05
61.00
June 16 Sale
5
2.40
12
15
3.05
45.75
5
3.05
15.25
June 20 Purchases
20
3.10
62
15
3.05
45.75
20
3.10
62.00
June 23 Sales
15
3.05
45.75
10
3.10
31.00
10
3.10
31
June 30 Purchases
15
4.20
63
10
$3.10
$31.00
15
$4.20
$63.00
TOTAL
80
$246
55
$152
25
$94
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