The following data regarding purchases and sales of a commodity were taken from
ID: 2588132 • Letter: T
Question
The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:
May 1 Balance 25 units at $41
May 6 Sale 20 units
May 8 Purchase 20 units at $42
May 16 Sale 10 units
May 20 Purchase 20 units at $43
May 23 Sale 25 units
May 30 Purchase 15 units at $44
(a) Determine the total cost of the inventory balance at May 31, using the first-in, first-out method. Also, identify the quantity, unit price, and total cost of each lot/layer in the ending inventory.
(b) Determine the total cost of the inventory balance at May 31, using the last-in, first-out method. Also, identify the quantity, unit price, and total cost of each lot/layer in the ending inventory.
A. FIFO
B. LIFO
Explanation / Answer
A. FIFO
Total sales = 20+10+25 = 55 units
Total purchases = 20+20+15 = 55 units
Opening balance = 25 units
Cost of goods sold
Ending inventory = opening stock + purchases - sales
= 25+55-55
= 25 units
Total cost of inventory as on May 31
B. LIFO
Cost of goods sold
Ending inventory = 25 units
COGS Units Price Total Sales from May 1 invetory 20 $41 $820 Sales from May 1 invetory 5 $41 $205 Sales from May 8 purchase 20 $42 $840 Sales from May 20 purchase 10 $43 $430 Total 55 $2,295Related Questions
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