3. During June, the following changes in inventory item 100 took place: June 1 B

Question

3. During June, the following changes in inventory item 100 took place:

           June   1     Balance                         1,000 units @ $20

                      8     Sold                                  500 units @ $50

                    10     Purchased                        700 units @ $21

                    14     Sold                                  800 units @ $50

                    24     Purchased                        500 units @ $22

Instructions

What is the cost of goods sold and the ending inventory for item 100 under the following methods? (Show calculations.)

A. Periodic

(a)   FIFO

(b)   LIFO

B. Perpetual

(a)   FIFO

(b)   LIFO

Explanation / Answer

Periodic 1 FIFO Cost of Ending Inventory Quantity of Closing Inventory 1000-500+700-800+500 Quantity of Closing Inventory 900 Units 900 Units Will Comprise of Quantity at the rate of Value Purchase as on June 24 500 22 11000 Purchase as on June 10 400 21 8400 Total 900 19400 Cost of Inventory of 900 Units $19400 Cost of Goods Sold Opeing Inventory+Purchase Inventory-Closing Inventory Cost of Goods Sold (1000*20)+((700*21)+(500*22))-19400 Cost of Goods Sold $26300 Periodic 1 LIFO Cost of Ending Inventory Quantity of Closing Inventory 1000-500+700-800+500 Quantity of Closing Inventory 900 Units 900 Units Will Comprise of Quantity at the rate of Value Opening Balance 900 20 18000 Total 900 18000 Cost of Inventory of 900 Units $ 18000 Cost of Goods Sold Opeing Inventory+Purchase Inventory-Closing Inventory Cost of Goods Sold (1000*20)+((700*21)+(500*22))-18000 Cost of Goods Sold $27700

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