Question

Penn Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, prior year 1,910 $ 6 For the current year: Purchase, March 21 5,100 8 Purchase, August 1 2,980 9 Inventory, December 31, current year 4,180 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.)

Answer 1

Answer:

	Units	Unit cost	Total
Inventory, December 31	1910	6	11,460
Purchase, March 21	5100	8	40,800
Purchase, August 1	2980	9	26,820
Total	9,990		79,080
FIFO:
Ending inventory	36,420	=(2980*9)+(1200*8)
Cost of goods sold	42,660	=79,080-36,420
LIFO:
Ending inventory	29,620	=(1910*6)+(2270*8)
Cost of goods sold	49,460	=79,080-29,620
Average cost:
Average cost = 79,080/9,990 = $7.92
Ending inventory	33,106	=4180*7.92
Cost of goods sold	45,974	=79,080-33,106