During its first year of operations, Maine Corporation made the following invent
ID: 2529149 • Letter: D
Question
During its first year of operations, Maine Corporation made the following inventory purchases and sales.
Date
Units Purchased/(Sold)
Cost Per Unit
Inventory Balance
(in units)
April 3
5,000
$4.25
5,000
April 10
2,000
$4.00
7,000
April 16
(4,000)
3,000
April 20
5,000
$4.50
8,000
April 25
2,000
$4.75
10,000
Calculate ending inventory and cost of goods sold using the 1) FIFO method under a periodic inventory system 2) FIFO method under a perpetual inventory system 3) LIFO method under a periodic inventory system and 4) LIFO method under a perpetual inventory system.
Date
Units Purchased/(Sold)
Cost Per Unit
Inventory Balance
(in units)
April 3
5,000
$4.25
5,000
April 10
2,000
$4.00
7,000
April 16
(4,000)
3,000
April 20
5,000
$4.50
8,000
April 25
2,000
$4.75
10,000
Explanation / Answer
Ans.1 FIFO Periodic Inventory Method: *Ending Inventory 44250 *Cost of goods sold 17000 *Calculation: Ending inventory units = 10000 (given) Date Units Rate Amount 25-Apr 2000 4.75 9500 20-Apr 5000 4.5 22500 10-Apr 2000 4 8000 3-Apr 1000 4.25 4250 Total 10000 44250 Sold Units = 4000 Date Units Rate Amount 3-Apr 4000 4.25 17000 Ans.2 FIFO Perpetual Inventory Method: Purchase Sales Balance Date Units Rate Amount Units Rate Amount Units Rate Amount 3-Apr 5000 4.25 21250 5000 4.25 21250 10-Apr 2000 4 8000 5000 4.25 21250 2000 4 8000 16-Apr 4000 4.25 17000 1000 4.25 4250 2000 4 8000 20-Apr 5000 4.5 22500 1000 4.25 4250 2000 4 8000 5000 4.5 22500 25-Apr 2000 4.75 9500 1000 4.25 4250 2000 4 8000 5000 4.5 22500 2000 4.75 9500 Total 17000 44250 *Ending Inventory 44250 *Cost of goods sold 17000 Ans.3 LIFO Periodic Inventory Method: *Ending Inventory 42750 *Cost of goods sold 18500 *Calculation: Ending inventory units = 10000 (given) Date Units Rate Amount 3-Apr 5000 4.25 21250 10-Apr 2000 4 8000 20-Apr 3000 4.5 13500 Total 10000 42750 Sold Units = 4000 Date Units Rate Amount 25-Apr 2000 4.75 9500 20-Apr 2000 4.5 9000 Total 4000 18500 FIFO Perpetual Inventory Method: Purchase Sales Balance Date Units Rate Amount Units Rate Amount Units Rate Amount 3-Apr 5000 4.25 21250 5000 4.25 21250 10-Apr 2000 4 8000 5000 4.25 21250 2000 4 8000 16-Apr 2000 4 8000 2000 4.25 8500 3000 4.25 12750 20-Apr 5000 4.5 22500 3000 4.25 12750 5000 4.5 22500 25-Apr 2000 4.75 9500 3000 4.25 12750 5000 4.5 22500 2000 4.75 9500 Total 16500 44750 *Ending Inventory 44750 *Cost of goods sold 16500
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