Exercise 6-7 Sheffield Corp. reports the following for the month of June. Unit U

Question

Exercise 6-7 Sheffield Corp. reports the following for the month of June. Unit Units Cost Total Cost $1,264 5,056 5,214 June 1 Inventory 316 $4 12 Purchase 632 23 Purchase 474 11 30 Inventory 158 [X] Your answer is incorrect. Try again. Compute the cost of the ending inventory and the cost of goods sold under FIFO and LIFO. FIFO LIFO dy -, $1- Cost of the ending inventory 7,742 $ Cost of goods sold 3,792 11,534 LINK TO TEXT VIDEO: SIMILAR EXERCISE Privacy Policy 1 2000-2018 John Wiley & Sons, Inc, All Rights Reserved. A Division of John Wiley & Sons, Inc. F1 FA F5 F6

Explanation / Answer

note:

cost of ending inventory under FIFO:

ending inventory will consist of 158 units from the june 23 purchase, since all the other will be sold if FIFO is used.

cost of ending inventory under FIFO = $11 * 158 =>$1,738..

cost of goods sold = [opening inventory * unit cost] + [ june 12 purchase *unit cost] + [ june 23 purchase - ending inventory] * unit cost.

=> [316 * $4] + [632*$8] + [474-158] * $11

=>$9,796.

note:

cost of ending inventory under LIFO:

158 units out of opening inventory will form part of ending inventory , all the other units will be sold.

=>cost of ending inventory = 158 units * $4 =>$632.

cost of good sold under LIFO.

(opening inventory - ending inventory)* unit cost + june 12 purchase * unit cost + june 23 * unit cost

=> [ 316-158]*$4 + [632*$8] + [474*$11]

=>$632 + $5,056 + $5,214.

=>$10,902.

FIFO LIFO Cost of the ending inventory $1,738 $632 cost of goods sold $9,796 $10,902

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