1. Use the information below to answer the following questions. The following un

Question

1. Use the information below to answer the following questions. The following units of an inventory item were available for sale during the year: Beginning inventory 10 units at $55 First purchase 25 units at $60 Second purchase 30 units at $65 Third purchase 15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold.

a. Calculate the value of ending inventory using FIFO.

b. Calculate the value of ending Inventory using LIFO.

c. Calculate the value of ending inventory using Weighted Average

Explanation / Answer

Requirement a Valuation Of Inventory using FIFO Units Rate Value Begining Inventory 10 55      550 First purchase 25 60 1,500 Second purchase 30 65 1,950 Third Purchase 15 70 1,050 Total Purchase 80 5,050 Sales -60 Ending Inventory 20 68.75 1,375 Note: (15*70)+(5*65) =1,375 Requirement b Valuation Of Inventory using LIFO Units Rate Value Begining Inventory 10 55      550 First purchase 25 60 1,500 Second purchase 30 65 1,950 Third Purchase 15 70 1,050 Total Purchase 80 5,050 Sales -60 Ending Inventory 20 57.5 1,150 Note: (10*55)+(10*60) = 1,150 Requirement c Valuation Of Inventory using Weighted Average Units Rate Value Begining Inventory 10 55      550 First purchase 25 60 1,500 Second purchase 30 65 1,950 Third Purchase 15 70 1,050 Total Purchase 80 63.125 5,050 Sales -60 Ending Inventory 20 63.125 1,263 Note: 20 X63.125 = 1,263

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