Question

Concord Company uses a periodic system reports the following for the month of June.

				Units			Unit Cost			Total Cost
June 1		Inventory		200			$5			$ 1,000
12		Purchase		450			6			2,700
23		Purchase		320			7			2,240
30		Inventory		120

Compute the cost of the ending inventory and the cost of goods sold under FIFO and LIFO.

		FIFO		LIFO
Cost of the ending inventory		$		$
Cost of goods sold

Answer 1

As the date of sale is not given in the question I am assuming that the sale has been made at the end of the month.

Under FIFO method goods purchased first are sold first

Sales made = beginning inventory + purchase - ending inventory

= 200 + 450 + 320 - 120

= 850 units

These sale will be from 200 units from June 1 + 450 units from June 12 + 200 units from June 23

Cost of goods sold = 200*5 + 450*6 + 200*7

= 1,000 + 2,700 + 1,400

= $ 5,100

Cost of inventory will be from purchase on June 23

= 120*7

= $840

Under LIFO goods purchased last are sold first.

Sale of 850 will be from 320 units from June 23 + 450 units from June 12 + 80 units from beginning inventory

Cost of goods sold

= 320*7 + 450*6 + 80*5

= 2,240 + 2,700 + 400

= $5,340

Cost of inventory will be from beginning inventory of 120 units

= 120*5

= $600

Please note the assumptions I have made in the solution.