The beginning inventory balances of Item B on August 1 and the purchases of the

Question

The beginning inventory balances of Item B on August 1 and the purchases of the item during the month of August were as follows:

August
1 Beginning Inventory 800 units @ $10.00 = $8,000

9 Purchase 700 units @ $10.50 = $7,350

11 Purchase 500 units @ $11.00 = $5,500

23 Purchase 200 units @ $11.25 = $2,250

31 Total - 2,200 - $23,100


At August 31, the ending inventory consisted of 900 units. Determine the ending inventory and cost of goods sold for August based on each of the following methods of inventory valuation. Assume a periodic inventory system

a.
Last-in, first-out - Grading Component Element 1

b.
First-in, first-out - Grading Component Element 2
c.
Average cost - Grading Component Element 3

Explanation / Answer

LIFO last ones purchased were first ones sold So inventory is 800*10 +100*10.50= 9,050 COGS is 23,100-9,050= 14,050 FIFO first ones purchased were first ones sold So inventory is 200*11.25 +500*11 +200*10.50= 9,850 COGS is 23,100-9,850= 13,250 Average cost 23,100/2,200= 10.50 So inventory is 900*10.50= 9,450 COGS is 23,100-9,450= 13,650

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