Question

Sarasota Appliance uses a perpetual inventory system. For its flat-screen television sets, the January 1 inventory was 3 sets at $605 each. On January 10, Sarasota purchased 6 units at $745 each. The company sold 2 units on January 8 and 4 units on January 15. Compute the ending inventory under FIFO. (Round answer to 0 decimal places, e.g. 1,250.) FIFO $ The ending inventory eTextbook and Media 0 decimal places, e.g. 1,250.) Compute the ending inventory under LIFO. (Round answer to LIFO $ The ending inventory eTextbook and Media

Answer 1

Solutions:

Computation of ending inventory under FIFO (Perpetual)
Date	Goods Purchased			Cost of goods sold			Inventory Balance
	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
1-Jan							3	$605.00	$1,815.00
8-Jan				2	$605.00	$1,210.00	1	$605.00	$605.00
10-Jan	6	$745.00	$4,470.00				1	$605.00	$605.00
							6	$745.00	$4,470.00
15-Jan				1	$605.00	$605.00	3	$745.00	$2,235.00
				3	$745.00	$2,235.00
Ending Inventory							3		$2,235.00
Computation of ending inventory under LIFO (Perpetual)
Date	Goods Purchased			Cost of goods sold			Inventory Balance
	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
1-Jan							3	$605.00	$1,815.00
8-Jan				2	$605.00	$1,210.00	1	$605.00	$605.00
10-Jan	6	$745.00	$4,470.00				1	$605.00	$605.00
							6	$745.00	$4,470.00
15-Jan				4	$745.00	$2,980.00	1	$605.00	$605.00
							2	$745.00	$1,490.00
Ending Inventory							3		$2,095.00
Computation of ending inventory under Moving Average (Perpetual)
Date	Goods Purchased			Cost of goods sold			Inventory Balance
	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
1-Jan							3	$605.00	$1,815.00
8-Jan				2	$605.00	$1,210.00	1	$605.00	$605.00
10-Jan	6	$745.00	$4,470.00				1	$605.00	$605.00
							6	$745.00	$4,470.00
Average cost							7	$725.00	$5,075.00
15-Jan				4	$725.00	$2,900.00	3	$725.00	$2,175.00
Ending Inventory							3		$2,175.00