Lan Enterprises uses a periodic inventory system for buckets it sells. It had a
ID: 2729977 • Letter: L
Question
Lan Enterprises uses a periodic inventory system for buckets it sells. It had a beginning inventory on April 1 of 80 units at a cost of $6 per unit. During April, the following purchases and sales were made. Instructions: Compute the April 30 ending inventory and April cost of goods sold under (a) average cost, (b) FIFO, and (c) LIFO. Provide appropriate supporting calculations. (1) Average - Ending Inventory = $; Cost of Goods Sold = $ (2) FIFO - Ending Inventory = $; Cost of Goods Sold = $ (3) LIFO - Ending Inventory = $ Cost of Goods Sold = $Explanation / Answer
Requirement 1:
Average Cost Method:
Total of goods available for sale
Units
Cost
Value
80
6
48
60
7
420
120
7.5
900
90
8
720
50
8.8
440
400
2528
Average Cost = Value / Units = 2528 / 400 = $6.32
Ending Inventory in units
= Beginning Inventory + Purchases – Units Sold
= 80 + 320 – 330
= 70 units
Ending Inventory Value
= 70 * 6.32
= $442.4
Cost of Goods Sold
= 330 * 6.32
= $2085.6
Requirement 2:
FIFO:
Ending Inventory = (50*8.8) + (20*8)
= 440 + 160
= 600
Cost of Goods Sold
= (80*6) + (60*7) + (120*7.5) + (70*8)
= 480 + 420 + 900 + 560
= $2360
Requirement 3:
LIFO:
Ending Inventory = (70*6)
= $420
Cost of Goods Sold
= (10*6) + (60*7) + (120*7.5) + (90*8) + (50*8.8)
= 60 + 420 + 900 + 720 + 440
= $2540
Units
Cost
Value
80
6
48
60
7
420
120
7.5
900
90
8
720
50
8.8
440
400
2528
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.