You are provided with the following information for Splish Brothers Inc. Splish Brothers Inc. uses the periodic system of accounting for its inventory transactions.
March 1 Beginning inventory 1,935 liters at a cost of 58¢ per liter.
March 3 Purchased 2,475 liters at a cost of 63¢ per liter.
March 5 Sold 2,330 liters for $1.05 per liter.
March 10 Purchased 3,945 liters at a cost of 70¢ per liter.
March 20 Purchased 2,490 liters at a cost of 78¢ per liter.
March 30 Sold 5,165 liters for $1.35 per liter.
(a1) Calculate the value of ending inventory that would be reported on the balance sheet, under each of the following cost flow assumptions. (Round answers to 2 decimal places, e.g. 125.25.)
(1) Specific identification method assuming:
(i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,330 liters from the March 3 purchase; and
ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 410 liters from March 1; 505 liters from March 3; 2,900 liters from March 10; 1,350 liters from March 20.
(2) FIFO
(3) LIFO
1. Specific identification method
Cost of Ending Inventory = March 1 Inventory + March 3 Inventory + March 10 Inventory + March 20 Inventory
Cost of Ending Inventory = (1935 - 1000 - 410) * 0.58 + (2475 - 1330 - 505) * 0.63 + (3945 - 2900) * 0.70 + (2490 - 1350) * 0.78
Cost of Ending Inventory = $2328.40
2. FIFO
Cost of Ending Inventory = March 10 Inventory + March 20 Inventory
Cost of Ending Inventory = (3945 - 3085) * .70 + 2490 * .78
Cost of Ending Inventory = $2544.20
3. LIFO
Cost of Ending Inventory = March 1 Inventory + March 3 Inventory + March 10 Inventory
Cost of Ending Inventory = 1935 * 0.58 + 145 * 0.63 + 1270 * 0.70
Cost of Ending Inventory = $2102.65
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