Homework Answers
A. The balance sheet figure is between the LIFO and FIFO figures.
It cab be understand by the following example
| Date | Units | Rate | Total | |
| May 01 | Beginning inventory | 19,000 | $7.50 | $142,500 |
| May 07 | Purchase | 26,000 | $9.00 | $234,000 |
| May 25 | Purchase | 31,000 | $11.00 | $341,000 |
| Aug 01 | Purchase | 21,500 | $12.00 | $258,000 |
| Nov 10 | Purchase | 31,000 | $13.50 | $418,500 |
| Units available for sale | 128,500 | $1,394,000 | ||
| Ending Inventory | 15,000 | |||
| LIFO | Units | Rate | Ending Inventory | |
| 15,000 | $7.50 | $112,500 | ||
| Weighted Average Cost basis | Units | Rate | Ending Inventory | |
| Cost per unit = $1,394,000/128,5000 = $10.85 | ||||
| 15,000 | $10.850 | $162,750 | ||
| FIFO | Units | Rate | Ending Inventory | |
| 15,000 | $13.50 | $202,500 |
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