Oahu Kiki tracks the number of units purchased and sold throughout each accounti

Question

Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method perpetually at the time of each sale, as if it uses perpetual inventory system. Assume Oahu Kiki's records show the following for the month of January. The company sold 290 units between January 16 and 23. Units Unit Cost Total Cost Beginning Inventory January 1 140 $ 80 $11,200 January 15 330 90 29,700 January 24 250 110 27,500 Date Purchase Purchase Required: Calculate the cost of ending inventory and the cost of goods sold using the FIFO and LIFO methods. FIFO LIFO Cost of Ending Inventory Cost of Goods Sold

Explanation / Answer

1. FIFO Method Date Particulars Quantity Rate $ Total $ Jan-01 Beginning inventory 140 80           11,200 Jan-15 Purchases 330 90           29,700 Jan-24 Purchases 250 110           27,500 Sub total 720           68,400 Jan 16 to Jan 23 Sales ( Cost of goods sold) -290 80/90         (24,700) Jan-31 Ending inventory 430           43,700 2. LIFO Method Date Particulars Quantity Rate $ Total $ Jan-01 Beginning inventory 140 80           11,200 Jan-15 Purchases 330 90           29,700 Jan-24 Purchases 250 110           27,500 Sub total 720           68,400 Jan 16 to Jan 23 Sales ( Cost of goods sold) -290 110/90         (31,100) Jan-31 Ending inventory 430           37,300

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