FIFO / LIFO. Please show solution for each step. 1) Company reported the followi

Question

FIFO / LIFO.  Please show solution for each step. 

1) Company reported the following information related to inventory and sales:

                                                           Units                  Unit Cost

Beginning Inventory                       1,000                     $20

Purchase No. 1                                 7,000                     $22

Purchase No. 2                                  2,000                     $23

Sales—7,000 units at $38 per unit.

Compute the following four amounts assuming a periodic inventory system:

Inventory Costing Method          Revenue            Cost of Goods Sold      Gross Margin      Balance Sheet Inventory

           FIFO

           LIFO

Also curious if Ending Inventory is same as Balance Sheet Inventory?

Explanation / Answer

FIFO- (7000*38=266000)= Revenue COGS= (1000*20)+(6000*22)=152000 Gross Margin = 266000-152000=144000 Balance Sheet Inventory= (1000*22)+(2000*23)=68000 LIFO Revenue= 266000 COGS=(2000*23)+(5000*22)=156000 Gross Margin=110000 Balance Sheet Inventory= 64000

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