Question

E6.6 Compute inventory and cost of goods sold using FIFO and LIFO. (LO 2) Ballas Co. uses a periodic inventory system. Its records show the following for the month of May, in which 68 units were sold Units Unit Cost May 1 15 Inventory Purchases Total Cost $240 275 420 24 Purchases Totals 90 $935 Instructions Compute the ending inventory at May 31 and cost of goods sold using the FIFO and LIFO methods. Prove the amount allocated to cost of goods sold under each method

Answer 1

sol. By using given data we can deteemine he fouowing cases, FIFO method :- cost of goods sold (30 units x88) + ( 25 units X 11) + (68 units - 30- 25 x12 using FIFO inventory $8)+ Perchase X11) +(68 units - 30-25 x 240 + 275+(13x12 ) dold cost of goods sold = $671 esing FIFO The Ending inventory value on may - Total costs of beginning inventory and purchases 31, costs of goods Sold : = $935 – $67) $264 . LIFO method - costs of goods sold 135 units x $12) + ( 25 units x $11) + El Purchased Perchased using LIFO ( 68 units - 35-25 x $8) Sold 420 +245 + (8x8) & $759 costs of goods Sold using ufo

The on - Ending inventory value Total cost of beginning entory and purchase may 31 is, costs & goods sold $935 – $759 = $ 176 There fore, FIFO LIFO Ending inventory at may 31 | $264 cost & goods sold $1.76 $671 $759