Question

June 1		Inventory		508			$6			$ 3,048
12		Purchase		1,016			9			9,144
23		Purchase		762			12			9,144
30		Inventory		254

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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

June 1	Inventory	508	$6	$ 3,048
12	Purchase	1,016	9	9,144
23	Purchase	762	12	9,144
30	Inventory	254

Goods available for sales = 508 + 1016 + 762 = 2286

Ending inventory = 254

Sold units = Goods available for sales - Ending inventory

Sold units = 2286 - 254 = 2032 units

FIFO (First in first out )

Cost of the ending inventory = 254 * 12 = 3048

Cost of goods sold

From Jun beginning layer = 508 * 6 = 3048

From Jun 12 layer = 1016 * 9 = 9144

From Jun 23 layer = 762-254 * 12 = 6096

Cost of goods sold = 3048 + 9144 + 6096 = 18288

LIFO (Last in first out )

Cost of the ending inventory = 254 * 6 = 1524

* From first layer (beginning inv. )

Cost of goods sold

From Jun 23 layer = 762 * 12 = 9144

From Jun 12 layer = 1016 * 9 = 9144

From Jun beginning layer = 508 - 254 * 6 = 1524

Cost of goods sold = 9144 + 9144 + 1524 = $19812