CengageNOWv2| Onlin eBook Show Me How Calculator FIFO and LIFO Costs Under Perpe

Question

CengageNOWv2| Onlin eBook Show Me How Calculator FIFO and LIFO Costs Under Perpetual Inventory System The following units of an item were available for sale during the year: 46 units at $43 23 units at $65 16 units at $46 23 units at $66 21 units at $48 12 units at $66 Beginning inventory Sale First purchase Sale Second purchase Sale The firm uses the perpetual inventory system, and there are 25 units of the item on hand at t a. What is the total cost of the ending inventory according to FIFO? b. What is the total cost of the ending inventory according to LIFO? Feedback Check My Work a. Note that this exercise uses the perpetual inventory system. FIFO means that the first units purchased a ending inventory is made up of the most recent purchases. Think of your inventory in terms of "layers. The inventory. Is the remaining amount of the beginning inventory layer enough to satisfy the second sale? If ne from the first purchase layer, Any remainder from the first purchase will then be considered as the oldest go from the first purchase is not enough to satisfy the third sale, then cost of merchandise sold will come from t second ourchase make up the endina inve Check My Work All work saved

Explanation / Answer

As Per FIFO Purchased Sales Closing Date Description units Value Total Cost units Value Total units Value Total Beginning Purchase 46 43            1,978.00 0 0 0 46 43 1,978.00 46*43 First Sale Sale 23 65 1495 23 43     989.00 23*43 First Purchase Purchase 16 46                736.00 39 1,725.00 989+736 Second Sale Sale 23 66 1518 16 46     736.00 16*46 2nd Purchase Purchase 21 48            1,008.00 37 1,744.00 736+1008 3rd Sale Sale 12 66 792 25 0 1,192.00 1744-(12*46) Total 83 0 Clsoing Quantity 25 Value of inventory As per FIFo 1192 As Per LIFO Purchased Sales Closing Date Description units Value Total Cost units Value Total units Value Total Beginning Purchase 46 43            1,978.00 0 0 0 46 43 1,978.00 46*43 First Sale Sale 23 65 1495 23 43     989.00 23*43 First Purchase Purchase 16 46                736.00 39 1,725.00 989+736 Second Sale Sale 23 66 1518 16     688.00 1725-(16*46)-(7*43) 2nd Purchase Purchase 21 48            1,008.00 37 1,696.00 688+1008 3rd Sale Sale 12 66 792 25 0 1,120.00 1696-(12*48) Total 83 0 Clsoing Quantity 25 Value of inventory As per LIFo 1120

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