Question

Whispering Winds Corp. began operations on July 1. It uses a perpetual inventory system. During July, the company had the following purchases and sales.

		Purchases
Date		Units		Unit Cost		Sales Units
July 1		9		$60
July 6						7
July 11		6		$64
July 14						6
July 21		8		$68
July 27						7

Calculate average cost for each unit. (For calculation and answers purpose round unit costs to 2 decimal places, e.g. 15.25.)

July 1		$
July 6		$
July 11		$
July 14		$
July 21		$
July 27		$

Determine the ending inventory under a perpetual inventory system using (1) FIFO, (2) moving-average, and (3) LIFO. (For calculation and answers purpose round unit costs to 2 decimal places, e.g. 15.25 and ending inventory values to 0 decimal places, e.g. 515.)

		FIFO		MOVING-AVERAGE		LIFO
The ending inventory under a perpetual inventory system		$enter a dollar amount

Answer 1

Correct Answer:

Requirement 1:

	A	B	C =B/A
	NO. OF UNTS	Total Cost	Average cost
01-Jul	9	$    540.00	$         60.00
06-Jul	2	$    120.00	$         60.00
11-Jul	8	$    468.00	$         58.50
14-Jul	2	$    117.00	$         58.50
21-Jul	10	$    661.00	$         66.10
27-Jul	3	$    198.30	$         66.10

Requirement 2:

Perpetual Inventory	FIFO	LIFO	Weighted Average
Ending Inventory	$ 204.00	$ 188.00	$ 234.30

Working:

Cost of Goods Available for sale
		Units	Cost per unit	value
Beginning Inventory				$                                -
Purchases
01-Jul		9	$                         60.00	$                       540.00
11-Jul		6	$                         64.00	$                       384.00
21-Jul		8	$                         68.00	$                       544.00
Total		23		$                   1,468.00

	FIFO Perpetual
A	Total Units Available for sale			23		$            1,468.00
	Units Sold			20
	Ending Inventory Units			3
	Valuation
	Cost of Goods Sold		9		$                         60.00	$                540.00
			6		$                         64.00	$                384.00
			5		$                         68.00	$                340.00
B	Cost of Goods Sold		20	units		$            1,264.00
A-B	Ending Inventory		3	units		$                204.00

	Moving Average
A	Total Units Available for sale			23		$            1,468.00
	Units Sold			20
	Ending Inventory Units			3
	Valuation
	Cost of Goods Sold		7		$                         60.00	$                420.00
			6		$                         58.50	$                351.00
			7		$                         66.10	$                462.70
B	Cost of Goods Sold		13	units		$            1,233.70
A-B	Ending Inventory		3	units		$                234.30

	LIFO Perpetual
A	Total Units Available for sale			23		$            1,468.00
	Units Sold			20
	Ending Inventory Units			3
	Valuation
	Cost of Goods Sold		7.00		$                         60.00	420.00
			6.00		$                         64.00	384.00
			7.00		$                         68.00	476.00
						-
						-
B	Cost of Goods Sold		20	units		$            1,280.00
A-B	Ending Inventory		3	units		$                188.00

End of answer.

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