Hull Company’s record of transactions concerning part X for the month of April w

Question

Hull Company’s record of transactions concerning part X for the month of April was as follows.

Purchases

Sales

Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost. (Round final answers to 0 decimal places, e.g. $6,548.)

Purchases

Sales

April 1 (balance on hand) 530 @ $5.30 April 5 730 4 830 @ 5.40 12 630 11 730 @ 5.70 27 1,660 18 630 @ 5.70 28 150 26 1,030 @ 6.00 30 630 @ 6.20

Explanation / Answer

Ending inventory = total purchases - total sales

                                = 4380 - 3170

                                = 1210 units

Computation of inventory under FIFO method :

units 630 at 6.20

units 580 at 6

total 1210

value of inventory

= ((630 * 6.20) + (580 * 6))

= 3906 + 3480

= 7,386

Computation of inventory under LIFO method :

= ((530 * 5.3) + (50 * 5.4) + (630 * 6.2))

= 2809 + 270 + 3906

= 6985

Computation of inventory under Average cost method :

   = 1210 * (6.2 + 6.0) / 2

   = 7,381

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