Altira Corporation uses a periodic inventory system. The following information r

Question

Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2018 is available: Aug.1 Inventory on hand—3,000 units; cost $6.50 each. 8 Purchased 12,000 units for $5.70 each. 14 Sold 9,000 units for $12.20 each. 18 Purchased 7,000 units for $5.20 each. 25 Sold 8,000 units for $11.20 each. 31 Inventory on hand—5,000 units. Required: Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using each of the following cost flow methods: FIFO, LIFO, Average cost

Explanation / Answer

Required: Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using each of the following cost flow methods: FIFO, LIFO, Average cost

FIFO LIFO Average cost No of units available for sales 22000 22000 22000 Cost of goods available for sale 124300 124300 124300 Ending inventory (5000*5.20)=26000 (3000*6.50+2000*5.70)=30900 (124300/22000)*5000 =28250 Cost of goods sold 98300 93400 96050

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