3. During June, the following changes in inventory item 100 took place: June 1 B

Question

3. During June, the following changes in inventory item 100 took place:

           June   1     Balance                         1,000 units @ $20

                      8     Sold                                  500 units @ $50

                    10     Purchased                        700 units @ $21

                    14     Sold                                  800 units @ $50

                    24     Purchased                        500 units @ $22

Instructions

What is the cost of goods sold and the ending inventory for item 100 under the following methods? (Show calculations.)

Under Perpetual MEthod

(a)   FIFO

(b)   LIFO

Explanation / Answer

FIFO Purchase Cost of goods sold Ending Inventory Date Units Cost per unit Total Cost Units Cost per unit Total Cost Units Cost per unit Total Cost June 1 1000 20 20000 1000 20 20000 8 500 20 10000 500 20 10000 10 700 21 14700 500 20 10000 700 21 14700 14 500 20 10000 400 21 8400 300 21 6300 24 500 22 11000 400 21 8400 500 22 11000 Total 2200 45700 1300 26300 900 19400 LIFO Purchase Cost of goods sold Ending Inventory Date Units Cost per unit Total Cost Units Cost per unit Total Cost Units Cost per unit Total Cost June 1 1000 20 20000 1000 20 20000 8 500 20 10000 500 20 10000 10 700 21 14700 500 20 10000 700 21 14700 14 700 21 14700 400 20 8000 100 20 2000 24 500 22 11000 400 20 8000 500 22 11000 Total 2200 45700 1300 26700 900 19000

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