Question

Sunland Company’s record of transactions for the month of April was as follows.

Purchases							Sales
April 1	(balance on hand)		1,020	@	$6.00		April 3		850	@	$10.00
4			2,550	@	6.08		9		2,380	@	10.00
8			1,360	@	6.40		11		1,020	@	11.00
13			2,040	@	6.50		23		2,040	@	11.00
21			1,190	@	6.60		27		1,530	@	12.00
29			850	@	6.79				7,820
			9,010

Assuming that perpetual inventory records are kept in dollars, determine the inventory using (1) FIFO and (2) LIFO. (Round answer to 0 decimal places, e.g. 2,760.)

		(1) FIFO		(2) LIFO
Inventory		$		$

Answer 1

Answer : Calculation of Inventory using FIFO

Inventory in Hand = Total Purchases - Total Sales

= 9010 - 7820

= 1190 units .

Under FIFO method first inventory is sold first.Therefore The Amount of Closing Inventory

= (850 * 6.79) + [(1190 - 850) * 6.60]

= 5771.5 + 2244

= 8015.5 or 8016

Calculation of Inventory using LIFO

Inventory in Hand = Total Purchases - Total Sales

= 9010 - 7820

= 1190 units .

Under LIFO method last inventory is sold first.Therefore The Amount of Closing Inventory

= (170 * 6.08) + [1020 * 6.00]

= 1033.6 + 6120

= 7153.6 or 7154