Question

lu Tepl D U 36 .P8-7 (Compute FIFO, LIFO, and Average-Cost) Ronaldo Company's record of transactions part VF5 for the month of September was as follows. Purchases Sales September 1 (balance on hand) 100 @ $5.00 September 5 300 400 @ 5.10 12 200 300 @ 5.30 27 800 200 @ 5.35 28 150 600 @ 5.60 200 @ 5.80 Instructions (a) Compute the inventory at September 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (Carry unit costs to the nearest cent.) (1) First-in, first-out (FIFO). (2) Average-cost (3) Last-in, first-out (LIFO). (b) If the perpetual inventory record is kept in dollars, and costs are computed at the tim amount would be shown as ending inventory in 1 and 2 above? (Carry average unit costs to four decimal places.)

Answer 1

Answer to (a) 1 Closing inventory under FIFO method is 350 units 2 Closing inventory under LIFO method is 350 units 3 Closing inventory under weighted average method is 350 units Answer to (b) 1 Cost of ending inventory under FIFO method is $2,000 i.e 150units @ $5.60 and 200 units @ $5.80 2 Cost of ending inventory under Average method is $1,977.309 350 units @ $5.6495 Working- Inventory record under FIFO method Cost of goods sold Purchases Sale Inventory in hand Unit cost Total Cost 5.00 Unit cost Total Cost Qty Unit cost Total Cost Qty Unit cost Total Cost Qty Date Qty 500 Sep-01 100 100 400 500 5.00 Sep-04 400 5.1 2040 2040 5.10 5.00 Sep-05 300 100 500 1020 1020 1020 1590 200 5.10 200 5.10 200 300 Sep-11 300 5.3 1590 5.10 5.30 1020 300 1590 200 Sep-12 200 5.10 5.30 1590 1070 300 Sep-18 200 5.35 1070 5.30 200 5.35 300 200 600 1590 1070 3360 5.30 Sep-26 600 5.6 3360 5.35 5.60 300 200 300 1590 1070 1680 Sep-27 800 5.30 5.35 5.60 300 1680 5.60 840 Sep-28 150 150 5.60 840 150 5.60 Sep-30 150 840 1160 200 5.8 1160 5.60 200 5.80 Total 7720 350 2000 9220 0 Inventory record under LIFO method Cost of goods sold Purchases Sale Inventory in hand Unit cost Total Cost Qty Unit cost Total Cost Qty Unit cost Total Cost Qty Unit cost Total Cost Date Qty 100 500 Sep-01 5.00 100 400 5.00 500 2040 Sep-04 400 5.1 2040 0 5.10 5.00 500 510 300 Sep-05 300 5. 1530 100 0l 100 5.10 500 510 1590 500 510 530 500 510 Sep-11 300 5.3 1590 100 5.00 100 300 100 5.10 5.30 1060 200 Sep-12 200 5.3 5.00 100 5.10 100 100 100 5.30 5.00 Sep-18 200 5.35 1070 5.10 100 530 1070 5.30 200 5.35 100 500 Sep-26 600 5.6 3360 5.00 510 100 5.10 530 1070 3360 100 5.30 200 600 5.35 5.60 500 510 530 Sep-27 800 600 5.6 3360 100 5.00 200 1070 100 100 5.35 5.10 5.30 0 500 255 500 100 100 50 530 Sep-28 150 5.3 5.00 5.1 255 50 5.10 5.00 5.10 100 Sep-30 200 5.8 1160 50 255 5.80 1160 1915 200 350 Total 9220 7805 Inventory record under weighted average cost method Purchases Sale Cost of goods sold Unit cost Total Cost Qty Inventory in hand Unit cost Total Cost Qty Unit cost Total Cost Date Qty Unit cost Total Cost Qty 5,0000 500 Sep-01 100 100 400 500 5.0000 0l 500 2040 2540 Sep-04 400 5.1000 2040 5.1000 5.0800 5.0800 1524 1016 Sep-05 300 300 200 5.0800 5.3000 Sep-11 300 1590 200 5.0800 1016 5.3000 5,2120 1590 300 500 300 2606 1563.6 5.2120 1042.4 5.2120 Sep-12 200 200 1563.6 1070 300 200 500 5.2120 5.3500 Sep-18 200 5.3500 1070 2633,6 5.2672 2633.6 3360 5.6000 500 Sep-26 600 3360 5.2672 600 5.6000 5.4487 5993.6 1100 5.4487 4358.982 300 5.4487 1634.618 Sep-27 800 800 5.4487 817.3091 150 5.4487 817.3091 Sep-28 150 150 5.4487 817.3091 150 5.8000 Sep-30 200 1160 200 350 350 5.8000 1160 5.6495 1977.309 5.6495 1977.309 Total 9220 7742.691