the questions are on the slide. I tried at the bottom please correct if wrong. F
ID: 2411982 • Letter: T
Question
the questions are on the slide. I tried at the bottom please correct if wrong. Fifo, Lifo, WA at periodic and perpetual. please, please, please explain.
Explanation / Answer
Perpetual Inventory Method
FIFO
Purchased
Sales
Closing
Units
Rate
Amount
Units
Rate
Amount
Units
Rate
Amount
1-Jun
300
$ 10.00
$ 3,000.00
10-Jun
200
$ 10.00
$ 2,000.00
100
$ 10.00
$ 1,000.00
11-Jun
800
$ 12.00
$ 9,600.00
100
$ 10.00
$ 1,000.00
800
$ 12.00
$ 9,600.00
900
$ 10,600.00
15-Jun
100
$ 10.00
$ 1,000.00
400
$ 12.00
$ 4,800.00
400
$ 12.00
$ 4,800.00
Under Fifo Method Those Inventory are sold First which are Purchased first .
See the sales of 500 Units on Jun 15, 100 units purchased first are taken first and then 400 units are taken from purchases made on 11th june.
LIFO
Purchased
Sales
Closing
Units
Rate
Amount
Units
Rate
Amount
Units
Rate
Amount
1-Jun
300
$ 10.00
$ 3,000.00
10-Jun
200
$ 10.00
$ 2,000.00
100
$ 10.00
$ 1,000.00
11-Jun
800
$ 12.00
$ 9,600.00
100
$ 10.00
$ 1,000.00
800
$ 12.00
$ 9,600.00
900
$ 10,600.00
15-Jun
500
$ 12.00
$ 6,000.00
100
$ 10.00
$ 1,000.00
300
$ 12.00
$ 3,600.00
400
$ 4,600.00
Value of Closing Stock Under Lifo is $ 4600.
Stock purchased last is issued first
Weighted Average
Purchased
Sales
Closing
Units
Rate
Amount
Units
Rate
Amount
Units
Rate
Amount
1-Jun
300
$ 10.00
$ 3,000.00
10-Jun
200
$ 10.00
$ 2,000.00
100
$ 10.00
$ 1,000.00
11-Jun
800
$ 12.00
$ 9,600.00
100
$ 10.00
$ 1,000.00
800
$ 12.00
$ 9,600.00
900
$ 11.00
$ 10,600.00
15-Jun
500
$ 11.00
$ 5,500.00
400
$ 11.00
$ 4,400.00
Value of Closing Stock is $4400.
Goods are issued at an Average cost of closing stock before issue.
Calculation of Cost of Goods Sold
FIFO
LIFO
Weighted Average
(A) Ending Inventory
$ 4,800.00
$ 4,600.00
$ 4,400.00
(B) Cost of Purchase
$ 12,600.00
$ 12,600.00
$ 12,600.00
(C=B-A)Cost of Goods Sold
$ 7,800.00
$ 8,000.00
$ 8,200.00
Periodic Inventory Method
Units
Cost per unit
value
Opening Stock
300
$ 10.00
$ 3,000.00
Purchases
Feb
800
$ 12.00
$ 9,600.00
Goods Available for Sale
1100
12600
Sold
700
The Cost of Goods Available for sale are $ 14292.
Average Cost of Inventory
Units
(A)
1100
Total Cost
(B)
$ 12,600.00
Average Cost
(C=B/A)
11.455
FIFO
Total Units Available for sale
1100
Units Sold
700
Closing Stock in Units
400
Valuation
Closing stock
400
@
$ 12.00
$ 4,800.00
Value Of Closing Stock
$ 4,800.00
Cost of Goods sold
(12600-4800)
$ 7,800.00
LIFO
Total Units Available for sale
1100
Units Sold
700
Closing Stock in Units
400
Valuation
Closing stock
300
@
$ 10.00
$ 3,000.00
100
@
$ 12.00
$ 1,200.00
Value Of Closing Stock
$ 4,200.00
Cost of Goods sold
(12600-4200)
$ 8,400.00
Weighted Average
Total Units Available for sale
1100
Units Sold
700
Closing Stock in Units
400
Valuation
Closing stock
400
@
$ 11.455
$ 4,581.82
Value Of Closing Stock
$ 4,581.82
Cost of Goods sold
(12600-4581.82)
$ 8,018.18
Under Periodic Inventory method Stock records are updated at the end of the year only.
Perpetual Inventory Method
FIFO
Purchased
Sales
Closing
Units
Rate
Amount
Units
Rate
Amount
Units
Rate
Amount
1-Jun
300
$ 10.00
$ 3,000.00
10-Jun
200
$ 10.00
$ 2,000.00
100
$ 10.00
$ 1,000.00
11-Jun
800
$ 12.00
$ 9,600.00
100
$ 10.00
$ 1,000.00
800
$ 12.00
$ 9,600.00
900
$ 10,600.00
15-Jun
100
$ 10.00
$ 1,000.00
400
$ 12.00
$ 4,800.00
400
$ 12.00
$ 4,800.00
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