In its first month of operations, Swifty Company made three purchases of merchandise in the following sequence: (1) 310 units at $7, (2) 470 units at $8, and (3) 230 units at $9. Assuming there are 360 units on hand, compute the cost of the ending inventory under the FIFO method and LIFO method. Swifty uses a periodic inventory system.
Ending inventory under FIFO Method
FIFO Method | Units | Rate | Amount |
Balance from 2 sequence | 130 | $ 8 | $ 1,040 |
Balance from 3 sequence | 230 | $ 9 | $ 2,070 |
Ending inventory | 360 | $ 3,110 |
Ending inventory under LIFO Method
LIFO Method | Units | Rate | Amount |
Balance from 2 sequence | 50 | $ 8 | $ 400 |
Balance from 1 sequence | 310 | $ 7 | $ 2,170 |
Ending inventory | 360 | $ 2,570 |
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