Question

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. 

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (C) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 60 units from beginning inventory and 190 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 80 units from the March 25 purchase.

Answer 1

Part A FIFO

	Goods purchased	Cost of goods sold	Balance in inventory
Date	Units	Unit cost	Total $	Units	Unit cost	Total $	Units	Unit cost	Total $
Mar. 1							90	50.80	4572
Mar. 5	220	55.80	12276				90	50.80	4572
							220	55.80	12276
Mar. 9				90	50.80	4572
				160	55.80	8928	60	55.80	3348
Mar. 18	80	60.80	4864				60	55.80	3348
							80	60.80	4864
Mar. 25	140	62.80	8792				60	55.80	3348
							80	60.80	4864
							140	62.80	8792
Mar. 29				60	55.80	3348	20	60.80	1216
				60	60.80	3648	140	62.80	8792
						$20496			$10008

Part B LIFO

	Goods purchased	Cost of goods sold	Balance in inventory
Date	Units	Unit cost	Total $	Units	Unit cost	Total $	Units	Unit cost	Total $
Mar. 1							90	50.80	4572
Mar. 5	220	55.80	12276				90	50.80	4572
							220	55.80	12276
Mar. 9				30	50.80	1524
				220	55.80	12276	60	50.80	3048
Mar. 18	80	60.80	4864				60	50.80	3048
							80	60.80	4864
Mar. 25	140	62.80	8792				60	50.80	3048
							80	60.80	4864
							140	62.80	8792
Mar. 29				120	62.80	7536	60	50.80	3048
							80	60.80	4864
							20	62.80	1256
						$21336			$9168