inverntory, March1 200 units @4.2 purchase, March7 700 units @ 4.2 Purchse, Marc

Question

inverntory, March1 200 units @4.2
purchase, March7 700 units @ 4.2
Purchse, March 16 140 units @ 4.5
Inventory, March 31 300 units
1- What is the value assigned to ending inventory using LIFO
2- What is the value assigned to cost of good sold suing FIFO inverntory, March1 200 units @4.2
purchase, March7 700 units @ 4.2
Purchse, March 16 140 units @ 4.5
Inventory, March 31 300 units
1- What is the value assigned to ending inventory using LIFO
2- What is the value assigned to cost of good sold suing FIFO inverntory, March1 200 units @4.2
purchase, March7 700 units @ 4.2
Purchse, March 16 140 units @ 4.5
Inventory, March 31 300 units
1- What is the value assigned to ending inventory using LIFO
2- What is the value assigned to cost of good sold suing FIFO

Explanation / Answer

1- What is the value assigned to ending inventory using LIFO

There are 1040 units available for sale during the period, since 300 remain in inventory, at the end of the period. The remaining 740 units are assumed to be sold. Under LIFO method, the ending inventory are assumed to be the oldest inventory units.

200 units @4.2 per unit= 840

100 units @ 4.2 per unit=420

Ending inventory =840+420

= 1260

2- What is the value assigned to cost of good sold suing FIFO

There are 1040 units available for sale during the period, since 300 remain in inventory, at the end of the period. The remaining 740 units are assumed to be sold. Under FIFO method, the cost of goods sold are assumed to be the oldest inventory units.

200 units@ 4.2 per unit = 840

540 units @4.2 per unit = 2268

cost of goods sold = 840+2268  

= 3108

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