Lopez Company reported the following current-year data for its only product. The company uses a periodic...

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Accounting

Lopez Company reported the following current-year data for itsonly product. The company uses a periodic inventory system, and itsending inventory consists of 360 units—120 from each of the lastthree purchases.
Jan. 1 Beginning inventory 220 units @ $2.80 = $ 616
Mar. 7 Purchase 480 units @ $3.25 = 1,560
July 28 Purchase 1,120 units @ $3.30 = 3,696
Oct. 3 Purchase 1,000 units @ $3.60 = 3,600
Dec. 19 Purchase 400 units @ $3.70 = 1,480
Totals 3,220 units $ 10,952

Determine the cost assigned to ending inventory and to cost ofgoods sold for the following. (Do not round intermediatecalculations and round your answers to 2 decimalplaces.)


Which method yields the highest net income?

LIFO
Specific identification
FIFO
Weighted average

Answer & Explanation Solved by verified expert

3.5 Ratings (649 Votes)

Solution 1 Computation of COGS and ending inventory Periodic FIFO Particulars Cost of goods available for sale Cost of goods sold Ending Inventory Nos of units Unit Cost Cost of goods available for sale Nos of units sold Unit Cost Cost of goods sold Nos of units in ending inventory Unit Cost Ending inventory Beginning inventory 220 280 616 220 280 61600 0 280 000 Purchases 7Mar 480 325 1560 480 325 156000 0 325 000 28Jul 1120 330 3696 1120 330 369600 0 330 000 3Oct 1000 360 See Answer

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Jan.	1	Beginning inventory	220	units	@ $2.80	=	$	616
Mar.	7	Purchase	480	units	@ $3.25	=		1,560
July	28	Purchase	1,120	units	@ $3.30	=		3,696
Oct.	3	Purchase	1,000	units	@ $3.60	=		3,600
Dec.	19	Purchase	400	units	@ $3.70	=		1,480
		Totals	3,220	units			$	10,952