Altira Corporation uses a periodic inventory system. The following information r
ID: 2391247 • Letter: A
Question
Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2018 is available:
Required:
Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using each of the following cost flow methods:
Explanation / Answer
Answers
----Please follow “Cost of Goods Sold” column and “Ending Inventory” column for answer values---
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
7000
$ 8.10
$ 56,700.00
7000
$ 8.10
$ 56,700.00
0
$ 8.10
$ -
Purchases:
08-Aug
20000
$ 6.50
$ 1,30,000.00
20000
$ 6.50
$ 1,30,000.00
0
$ 6.50
$ -
18-Aug
11000
$ 6.00
$ 66,000.00
2000
$ 6.00
$ 12,000.00
9000
$ 6.00
$ 54,000.00
TOTAL
38000
$ 2,52,700.00
29000
$ 1,98,700.00
9000
$ 54,000.00
LIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
7000
$ 8.10
$ 56,700.00
0
$ 8.10
$ -
7000
$ 8.10
$ 56,700.00
Purchases:
08-Aug
20000
$ 6.50
$ 1,30,000.00
18000
$ 6.50
$ 1,17,000.00
2000
$ 6.50
$ 13,000.00
18-Aug
11000
$ 6.00
$ 66,000.00
11000
$ 6.00
$ 66,000.00
0
$ 6.00
$ -
TOTAL
38000
$ 2,52,700.00
29000
$ 1,83,000.00
9000
$ 69,700.00
Average Method
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
7000
$ 8.10
$ 56,700.00
Purchases:
08-Aug
20000
$ 6.50
$ 1,30,000.00
18-Aug
11000
$ 6.00
$ 66,000.00
TOTAL
38000
6.65
$ 2,52,700.00
29000
6.65
$ 1,92,850.00
9000
$ 6.65
$ 59,850.00
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
7000
$ 8.10
$ 56,700.00
7000
$ 8.10
$ 56,700.00
0
$ 8.10
$ -
Purchases:
08-Aug
20000
$ 6.50
$ 1,30,000.00
20000
$ 6.50
$ 1,30,000.00
0
$ 6.50
$ -
18-Aug
11000
$ 6.00
$ 66,000.00
2000
$ 6.00
$ 12,000.00
9000
$ 6.00
$ 54,000.00
TOTAL
38000
$ 2,52,700.00
29000
$ 1,98,700.00
9000
$ 54,000.00
LIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
7000
$ 8.10
$ 56,700.00
0
$ 8.10
$ -
7000
$ 8.10
$ 56,700.00
Purchases:
08-Aug
20000
$ 6.50
$ 1,30,000.00
18000
$ 6.50
$ 1,17,000.00
2000
$ 6.50
$ 13,000.00
18-Aug
11000
$ 6.00
$ 66,000.00
11000
$ 6.00
$ 66,000.00
0
$ 6.00
$ -
TOTAL
38000
$ 2,52,700.00
29000
$ 1,83,000.00
9000
$ 69,700.00
Average Method
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
7000
$ 8.10
$ 56,700.00
Purchases:
08-Aug
20000
$ 6.50
$ 1,30,000.00
18-Aug
11000
$ 6.00
$ 66,000.00
TOTAL
38000
6.65
$ 2,52,700.00
29000
6.65
$ 1,92,850.00
9000
$ 6.65
$ 59,850.00
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