Kindly, use excel or tables to do the calculation. Question 1: (FIFO and LIFO—Pe
ID: 2570400 • Letter: K
Question
Kindly, use excel or tables to do the calculation.
Question 1:
(FIFO and LIFO—Periodic and Perpetual) Inventory information for UMB Corp. discloses the following information for the month of June.
June 1 Balance 450 units @ $1 June 10 Sold 300 units @ $2.40
11 Purchased 1,200 units @ $2 15 Sold 750 units @ $2.50
20 Purchased 750 units @ $3 27 Sold 450 units @ $2.70
Instructions
(b) Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, compute the cost of goods sold and ending inventory under (1) LIFO and (2) FIFO.
Explanation / Answer
Solution:
Under perpetual system, inventory is updated after each transaction whether sale or purchase of units.
Part b-1) LIFO – Perpetual Inventory method
Under LIFO method, the newest purchased units are issued first
Perpetual LIFO
Goods Purchased
Cost of Goods Sold
Inventory Balance
# of units
Unit Cost
Cost per unit
# of units
Cost per unit
Cost of goods sold
# of units
Cost per unit
Inventory Balance
June 1 Beginning
450
$1.00
$450
June 10 Sales
300
$1.00
$300
150
$1.00
$150
June 11 Purchases
1200
$2.00
$2,400.00
150
$1.00
$150
1200
$2.00
$2,400
1350
$2,550
June 15 Sales
0
$0.00
$0
150
$1.00
$150
750
$2.00
$1,500
450
$2.00
$900
750
$1,500
June 20 Purchases
750
$3.00
$2,250.00
150
$1.00
$150
450
$2.00
$900
750
$3.00
$2,250
$3,300
June 27 Sales
450
$3.00
$1,350
150
$1.00
$150
450
$2.00
$900
300
$3.00
$900
$1,950
$3,150
Cost of Goods Sold (LIFO Perpetual) = $3,150
Ending Inventory (LIFO Perpetual) = $1,950
Part b-2) FIFO Method using Perpetual Inventory Method
Under FIFO method, the oldest units are sold first
Perpetual FIFO
Goods Purchased
Cost of Goods Sold
Inventory Balance
# of units
Unit Cost
Cost per unit
# of units
Cost per unit
Cost of goods sold
# of units
Cost per unit
Inventory Balance
June 1 Beginning
450
$1.00
$450
June 10 Sales
300
$1.00
$300
150
$1.00
$150
June 11 Purchases
1200
$2.00
$2,400.00
150
$1.00
$150
1200
$2.00
$2,400
1350
$2,550
June 15 Sales
150
$1.00
$150
0
$0.00
$0
600
$2.00
$1,200
600
$2.00
$1,200
750
$1,350
June 20 Purchases
750
$3.00
$2,250.00
600
$2.00
$1,200
750
$3.00
$2,250
1350
$3,450
June 27 Sales
450
$2.00
$900
150
$2.00
$300
$750
$3.00
$2,250
$2,550
$2,550
Cost of Goods Sold (FIFO Perpetual) = $2,550
Ending Inventory (FIFO Perpetual) = $2,550
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Perpetual LIFO
Goods Purchased
Cost of Goods Sold
Inventory Balance
# of units
Unit Cost
Cost per unit
# of units
Cost per unit
Cost of goods sold
# of units
Cost per unit
Inventory Balance
June 1 Beginning
450
$1.00
$450
June 10 Sales
300
$1.00
$300
150
$1.00
$150
June 11 Purchases
1200
$2.00
$2,400.00
150
$1.00
$150
1200
$2.00
$2,400
1350
$2,550
June 15 Sales
0
$0.00
$0
150
$1.00
$150
750
$2.00
$1,500
450
$2.00
$900
750
$1,500
June 20 Purchases
750
$3.00
$2,250.00
150
$1.00
$150
450
$2.00
$900
750
$3.00
$2,250
$3,300
June 27 Sales
450
$3.00
$1,350
150
$1.00
$150
450
$2.00
$900
300
$3.00
$900
$1,950
$3,150
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