1. Exercise 7-9 (Algorithmic) Periodic Inventory by Three Methods; Cost of Merch

Question

1. Exercise 7-9 (Algorithmic) Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 40 units @ $130 Mar. 10 Purchase 50 units @ $142 Aug. 30 Purchase 10 units @ $146 Dec. 12 Purchase 100 units @ $152 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Hide Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations and final answers to the nearest whole dollar.

Explanation / Answer

FIFO: first in first out. So inventory value would be 100x 152 + 90x146. Cost would be what is left over. LIFO: last in first out. So inventory value would be 80 x 10 Cost would be what is left over. That is assuming that all were sold on Dec. 31.

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