Required information Exercise 8-14 Inventory cost flow methods; perpetual system

Question

Required information Exercise 8-14 Inventory cost flow methods; perpetual system [LO8-1, 8-4] Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018 Inventory on hand-2,700 units; cost $6.80 Aug.1 each 8 Purchased 13,500 units for $6.20 each. 14 Sold 10,800 units for $12.70 each 18 Purchased 8,100 units for $5.60 each. 25 Sold 9,800 units for $11.70 each 31 Inventory on hand-3,700 units Exercise 8-14 Part 1 Required 1. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the FIFO method. (Round "Cost per Unit" to 2 decimal places.) Cost of Goods Available for Sale Goods Sold- August 25 ost oS Inventory Balan August 14 Perpetual FIF oods | # of unit Available units Cost Cost of # of # of | Cost | Cost of units in Cost En Goods units per Go Sold ending per unit Inve for Sale sold per unit Goods units Cost Cost of Sold sold per unit invento Beg Invento Purchases 6.80 $ 18,360 2,700 6.80 $18,360 $ 6.80 $ 0 $ 6.80 $ 6.20 5.60 6.20 5.60 6.20 5.60 83,700 August 188,100t 5.60 45,360 Total 24,300 18,360 147,420 2,700

Explanation / Answer

FIFO (Perpetual) DATE Cost of goods available for sale Cost of Goods sold-Aug14 Cost of Goods sold-Aug 25 Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 2700 6.8 18360 2700 6.8 18360 Purchase 8-Aug 13500 6.2 83700 8100 6.2 50220 5400 6.2 33480 18-Aug 8100 5.6 45360 4400 5.6 24640 3700 5.6 20720 24300 147420 10800 68,580 9,800 58,120 3700 20,720 LIFO (Perpetual) DATE Cost of goods available for sale Cost of Goods sold-Aug14 Cost of Goods sold-Aug 25 Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 2700 6.8 18360 2700 6.8 18360 Purchase 8-Aug 13500 6.2 83700 10800 6.2 66960 1700 6.2 10540 1000 6.2 6200 18-Aug 8100 5.6 45360 8100 5.6 45360 24300 147420 10800 66,960 9,800 55,900 3700 24,560

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