Altira Corporation uses a periodic inventory system. The following information r

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:

1. fifo

2. lifo

3. average cost

Aug.1 Inventory on hand—3,500 units; cost $6.70 each. 8 Purchased 17,000 units for $6.20 each. 14 Sold 11,500 units for $12.70 each. 18 Purchased 9,500 units for $5.70 each. 25 Sold 10,500 units for $11.70 each. 31 Inventory on hand—8,000 units.

Explanation / Answer

1-Aug inventory on hand 3500 6.7 23450 8-Aug purchased 17000 6.2 105400 18-Aug purchased 9,500 5.7 54150 total 30000 183000 Sold 22000 1) FIFO cost of goods sold 1-Aug inventory on hand 3500 6.7 23450 8-Aug purchased 17000 6.2 105400 18-Aug purchased 1,500 5.7 8550 total 22000 137400 ending inventory 8000 *5.70= 45600 2) LIFO 18-Aug purchased 9,500 5.7 54150 8-Aug purchased 12,500 6.2 77500 total 22,000 131650 ending inventory 1-Aug inventory on hand 3500 6.7 23450 8-Aug purchased 4,500 6.2 27900 total 51350 3) Average cost 183000/30000 6.1 cost of goods sold   = 22000*6.10= 134200 Ending iventory      =   8,000*6.10= 48800 Answer- COGS inventory FIFO 137400 45600 LIFO 131,650 51350 Average cost 134200 48800

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