The following data pertains to On-Target Investment Accounting software packages
ID: 2541824 • Letter: T
Question
The following data pertains to On-Target Investment Accounting software packages in the inventory of Computer Program On-Target Outlets:
Determine the cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the FIFO method.
Determine the cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the LIFO method.
Determine the unit cost, cost of the inventory on December 31 and the cost of goods sold for the year ending on that date under the average cost method. (Round "Average unit cost" answers to 2 decimal places.)
Assume that the replacement cost of each unit on December 31 is $109.25. Using the lower of cost or market rule, find the inventory amount under each of the methods given in 1. (Round your answers to 2 decimal places.)
What is the difference between the cost and market value of the inventory using the LIFO method? (Round your answer to 2 decimal places.)
The following data pertains to On-Target Investment Accounting software packages in the inventory of Computer Program On-Target Outlets:
Explanation / Answer
Answer
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale $
Units sold
Cost/unit
COGS $
Units
Cost/unit
Ending inventory $
Beginning Inventory
190
111
21090
190
111
21090
0
111
0
Purchases:
May-10
130
109
14170
130
109
14170
0
109
0
Aug-18
200
108
21600
191
108
20628
9
108
972
Oct-01
190
109
20710
109
0
190
109
20710
TOTAL
710
$77570
511
$55888
199
$21682
LIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale $
Units sold
Cost/unit
COGS $
Units
Cost/unit
Ending inventory $
Beginning Inventory
190
111
21090
111
0
190
111
21090
Purchases:
May-10
130
109
14170
121
109
13189
9
109
981
Aug-18
200
108
21600
200
108
21600
0
108
0
Oct-01
190
109
20710
190
109
20710
0
109
0
TOTAL
710
$77570
511
$55499
199
$22071
Average Method
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
190
111
21090
Purchases:
May-10
130
109
14170
Aug-18
200
108
21600
Oct-01
190
109
20710
0
TOTAL
710
[77570/710] 109.25
$77570
511
109.25
$55826.75
199
109.25
$21740.75
FIFO
LIFO
Average
Cost of Ending Inventory (a)
$21682.00
$22071.00
$21740.75
Replacement cost (b)
$21740.75
$21740.75
$21740.75
Inventory amount in Balance sheet (Lower of ‘a’ and ‘b’ above)
$21682.00
$21740.75
$21740.75
* The difference between the cost and market value of the invenntory using LIFO method is $330.25 [21740.75 - 22071]
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale $
Units sold
Cost/unit
COGS $
Units
Cost/unit
Ending inventory $
Beginning Inventory
190
111
21090
190
111
21090
0
111
0
Purchases:
May-10
130
109
14170
130
109
14170
0
109
0
Aug-18
200
108
21600
191
108
20628
9
108
972
Oct-01
190
109
20710
109
0
190
109
20710
TOTAL
710
$77570
511
$55888
199
$21682
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