FIFO and LIFO Costs Under Perpetual Inventory System The following units of an item were available...

4.4 Ratings (860 Votes)

Ans. A	FIFO :
	Purchase				Cost of goods sold			Balance
	Transaction	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	Beginning inventory							38	$45.00	$1,710

	Sales				28	$45.00	$1,260	10	$45.00	$450

	First purchase	29	$48.00	$1,392				10	$45.00	$450
								29	$48.00	$1,392

	Sales				10	$45.00	$450	29	$48.00	$1,392

	Second purchase	28	$50.00	$1,400				29	$48.00	$1,392
								28	$50.00	$1,400

	Sales				29	$48.00	$1,392
					14	$50.00	$700	14	$50.00	$700

	Total				Cost of goods sold		$3,802	Ending inventory		$700

	*In FIFO method the units that have purchased first are released the first one.

Ans. B	Perpetual LIFO:
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	Beginning inventory							38	$45.00	$1,710

	Sales				28	$45.00	$1,260	10	$45.00	$450

	First purchase	29	$48.00	$1,392				10	$45.00	$450
								29	$48.00	$1,392

	Sales				10	$48.00	$480	10	$45.00	$450
								19	$48.00	$912

	Second purchase	28	$50.00	$1,400				10	$45.00	$450
								19	$48.00	$912
								28	$50.00	$1,400

	Sales				28	$50.00	$1,400
					15	$48.00	$720	10	$45.00	$450
								4	$48.00	$192

	Total				Cost of goods sold		$3,860	Ending inventory		$642

	*In LIFO method the units that have purchased last, are released the first one.

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!

Become a Member

Other questions asked by students