Question

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.

Answer 1

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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