SIMMONS COMPANY USES THE PERIODIC INVENTORY METHOD FOLLOWING, FOR THE YEAR 1999,

Question

SIMMONS COMPANY USES THE PERIODIC INVENTORY METHOD FOLLOWING, FOR THE YEAR 1999, INVENTORY INFORMATIONAVALBL AND HAD THE 1/1 Beginning Inventory 1/20 Purchase 7/25 Purchase 10/20 Purchase S 400 $2,000 $1,200 $2,100 100 200 300 $5 $6 $7 A PHYSICAL COUNT OF INVENTORY ON DECEMBER 31 REVEALED THAT THERE WERE 400 UNITS ON HAND.(ending inventory) INSTRUCTIONS: ASSUME THAT THE COMPANY USES THE FIFO METHOD a.) WHAT IS THE VALUE OF THE ENDING INVENTORY AT DECEMBER 3 b.)WHAT IS THE COST OF GOODS SOLD ASSUME THAT THE COMPANY USES THE LIFO METHOD a) WHAT IS THE VALUE OF THE ENDING INVENTORY AT DECEMBER 31 b.)WHAT IS THE COST OF GOODS SOLD INSTRUCTIONS: PLEASE USE THE ATTACHED BLANK SHEET AS YOUR WORKING PAPER. (SHOW ALL OF YOUR WORK.) 00 100 200 300 1o00 l20o 0S 21oo 5700 VAt

Explanation / Answer

Calculate ending inventory and cost of goods sold under FIFO and LIFO periodic method :

FIFO Method :

Ending inventory = 2700

Cost of goods sold = 3000

LIFO method :

ENding inventory = 1900

Cost of goods sold = 3800

FIFO LIFO no of units available for sale 1000 1000 Cost of goods available for sale 5700 5700 Ending inventory (300*7+100*6)=2700 (100*4+300*5)=1900 Cost of goods sold 3000 3800

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