Alternative Inventory Methods Frate Company was formed on December 1, 2015, and

Question

Alternative Inventory Methods

Frate Company was formed on December 1, 2015, and uses the periodic inventory system. The following information is available from Frate’s inventory records for Product Ply:

A physical inventory on March 31, 2016 shows 3200 units on hand.

Required:

For each method, enter your answers in chronological order.

Prepare schedules to compute the ending inventory at March 31, 2016 the under the following inventory methods:
(For the weighted average method, round the average cost per unit to two decimal places.)
1. FIFO

2. LIFO

3. Weighted average

Units Unit Cost January 1, 2016 (beginning inventory) 1600 $10.00 Purchases:       January 6, 2016 2300 11.00       January 25, 2016 2000 11.50       February 17, 2016 1400 12.00       March 27, 2016 1700 12.50

Explanation / Answer

FIFO: UNITS UNIT COST TOTAL COST Jan 25 2016 100 11.5 1150 Feb 172016 1400 12 16800 Mar 27 2016 1700 12.5 21250 March 312016 Ending inventory 3200 39200 LIFO UNITS UNIT COST TOTAL COST Beginning Inventory 1600 10 16000 Jan 6 2016 1600 11 17600 March 312016 Ending inventory 3200 33600 WIEGHTED AVERAGE UNITS UNIT COST TOTAL COST Beginning Inventory 1600 10 16000 Jan 6 2016 2300 11 25300 Jan 25 2016 2000 11.5 23000 Feb 17 2016 1400 12 16800 Mar 27 2016 1700 12.5 21250 Total 9000 102350 Weighted Average cost 11.372 Mar 31 2016 Ending inventory 3200 11.372 36390

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