Question

A company's inventory records indicate the following data for the month of July:

July 1	beginning	380 units at $15 each
July 5	purchased	270 units at $17 each
July 10	sold	400 units at $50 each
July 20	purchased	300 units at $22 each
July 25	sold	400 units at $50 each

If the company uses the perpetual inventory system, what would be the cost of its ending inventory and the cost of goods sold for July based on FIFO, LIFO and Weighted Average methods?

Answer 1

ANSWER:

AS PER FIFO METHOD(All Amounts In $)

DATE	PARTICULARS	RECEIPT			ISSUE			BALANCE
		QTY.	AMOUNT	COST	QTY.	AMOUNT	COST	QTY.	AMOUNT	COST
JULY 1	Beginning Inventory							380	15	5700
JULY 5	Purchased	270	17	4590				380	15	5700
								270	17	4590
JULY 10	Sale				400	50	20000	250	17	4250
JULY 20	Purchased	300	22	6600				250	17	4250
								300	22	6600
JULY 25	Sale				400	50	20000	150	22	3300
JULY 31	Cost of Ending Inventory							150	22	3300
Cost of Goods Sold	Opening Inventory+Cost of Purchased-Ending Inventory =5700+11190-3300 =13590

AS PER LIFO METHOD(All Amounts In $)

DATE	PARTICULARS	RECEIPT			ISSUE			BALANCE
		QTY.	AMOUNT	COST	QTY.	AMOUNT	COST	QTY.	AMOUNT	COST
JULY 1	Beginning Inventory							380	15	5700
JULY 5	Purchased	270	17	4590				380	15	5700
								270	17	4590
JULY 10	Sale				400	50	20000	250	15	3750
JULY 20	Purchased	300	22	6600				250	15	3750
								300	22	6600
JULY 25	Sale				400	50	20000	150	15	2250
JULY 31	Cost of Ending Inventory							150	15	2250
Cost of Goods Sold	Opening Inventory+Cost of Purchase-Ending Inventory =5700+11190-2250 =14640

AS PER WEIGHTED AVERAGE METHOD(All Amounts In $)

DATE	PARTICULARS	RECEIPT			ISSUE			BALANCE
		QTY.	AMOUNT	COST	QTY.	AMOUNT	COST	QTY.	AMOUNT	COST
JULY 1	Beginning Inventory							380	15	5700
								380	15	5700
JULY 5	Purchased	270	17	4590				380	15	5700
								270	17	4590
								650	15.83	10290
JULY 10	Sale				400	50	20000	250	15.83	3958
JULY 20	Purchased	300	22	6600				250	15.83	3958
								300	22	6600
								550	19.196	10558
JULY 25	Sale				400	50	20000	150	19.196	2879.4
JULY 31	Cost of Ending Inventory							150	19.196	2879.4
Cost of Goods Sold	Opening Inventory+Cost of Purchased--Ending Inventory =5700+11190-2879.4 =14010.6