Question

1. ABC Company had the following purchases and sales in June. What is the ending June inventory balance using the periodic FIFO and perpetual LIFO methods?

Date                   Action                      Units          Cost

June 1             Beg. Inventory           100               $2

June 6             Sale                                50

June 9             Purchase                      200              $4

June 15           Sale                               175

June 20           Purchase                      100              $5

June 25           Sale                               125

1. ABC Company had the following purchases and sales in June. What is the ending June inventory balance using the periodic FIFO and perpetual LIFO methods?

Date                   Action                      Units          Cost

June 1             Beg. Inventory           100               $2

June 6             Sale                                50

June 9             Purchase                      200              $4

June 15           Sale                               175

June 20           Purchase                      100              $5

June 25           Sale                               125

1. ABC Company had the following purchases and sales in June. What is the ending June inventory balance using the periodic FIFO and perpetual LIFO methods?

Date                   Action                      Units          Cost

June 1             Beg. Inventory           100               $2

June 6             Sale                                50

June 9             Purchase                      200              $4

June 15           Sale                               175

June 20           Purchase                      100              $5

June 25           Sale                               125

Answer 1

Correct Answer:

Periodic inventory

	FIFO	LIFO
Cost of Ending Inventory	$       250	$          100

Working:

Cost of Goods Available for sale
	Units	Cost per unit	value
Beginning Inventory	100	$         2.00	$                  200
Purchases	200	$         4.00	$                  800
Purchases	100	$         5.00	$                  500
Total	400		$              1,500

FIFO
A	Total Units Available for sale			400			$                1,500
	Units Sold			350
	Ending Inventory Units			50
	Valuation
	Cost of Goods Sold		100		$                2.00		$                    200
			200		$                4.00		$                    800
			50		$                5.00		$                    250
B	Total Cost of Goods Sold		350	units			$                1,250
A-B	Ending Inventory		50	units			$                    250

	LIFO
A	Total Units Available for sale			400			$                1,500
	Units Sold			350
	Ending Inventory Units			50
	Valuation
	Cost of Goods Sold		100		$                5.00		$                    500
			200		$                4.00		$                    800
			50		$                2.00		$                    100
B	Total Cost of Goods Sold		350	units			$                1,400
A-B	Ending Inventory		50	units			$                    100

Perpetual:

	FIFO	LIFO
Cost of Ending Inventory	$       250	$          100

Note: FIFO ending inventory remains same in periodic and perpetual inventory system.

	LIFO
A	Total Units Available for sale			400			$                1,500
	Units Sold			350
	Ending Inventory Units			50
	Valuation	From:
	Cost of Goods Sold	June-1	50		$                2.00		$                    100
		June 9	175		$                4.00		$                    700
		June 20	100		$                5.00		$                    500
		June 9	25		$                4.00		$                    100
B	Total Cost of Goods Sold		350	units			$                1,400
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