Question

Calculating COGS and Inventory under LIFO and FIFO INCREASE ONE PURCHASE QUANTITY AND DECREASE ONE SALES UNIT QUANTITY AND WORK THIS PROBLEM AGAIN. You should clearly indicate what you increased and what you decreased Dould Company sells many products. Sol is one of its popularitims. Below is an analysis of the inventory purchases and sales of Sol for the month of September. Donud Company uses the periodic inventory system Purchases Description Units Unit Coul Units Selling Price Bezinning inventory 100 Purchase S120 Purchase 575 9/16 S130 9/19 S130 $130 930 Sales Purchase INSTRUCTIONS Using the FIFO assumption, calculate the amount charged to cost of goods sold for September (Show computations) h Using the LIFO sumption, calculate the amount sined to the memory on and on September 30. (Show computations) c. Calculate the LIFO reserve that would be reported in the company's books on September 30 if using LIFO.

Answer 1

a. FIFO-COGS					FIFO-Inventory
Date	Sales Units	Unit Cost	Total		Units	Unit Cost	Total
9/4	70	$60	$4,200		100	$82	$8,200
9/16	30	$60	$1,800		40	$90	$3,600
	50	$78	$3,900				$11,800
9/19	10	$78	$780
	50	$82	$4,100
9/25	50	$82	$4,100
			$18,880
b. LIFO-COGS					LIFO-Inventory
Date	Sales Units	Unit Cost	Total		Units	Unit Cost	Total
9/4	60	$78	$4,680		90	$60	$5,400
	10	$60	$600		10	$82	$820
9/16	80	$82	$6,560		40	$90	$3,600
9/19	60	$82	$4,920				$9,820
9/25	50	$82	$4,100
			$20,860
c. LIFO Reserve
=FIFO Inventory - LIFO Inventory
=$11800-$9820
$1,980