Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost MethodsThe units of an item available for sale during the year were as follows:Jan. 1Inventory8units at $33$264Aug. 7Purchase18units at $35630Dec. 11Purchase15units at $37555 41units$1,449There are 16 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method (round per unit cost to two decimal places and your final answer to the nearest whole dollar).a.First-in, first-out (FIFO)$b.Last-in, first-out (LIFO)$c.Weighted average cost$

Question
Asked Sep 29, 2019

Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods

The units of an item available for sale during the year were as follows:

Jan. 1 Inventory 8 units at $33 $264
Aug. 7 Purchase 18 units at $35 630
Dec. 11 Purchase 15 units at $37 555
  41 units $1,449

There are 16 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using (a) the first-in, first-out (FIFO) method; (b) the last-in, first-out (LIFO) method; and (c) the weighted average cost method (round per unit cost to two decimal places and your final answer to the nearest whole dollar).

a. First-in, first-out (FIFO) $
b. Last-in, first-out (LIFO) $
c. Weighted average cost $
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Expert Answer

Step 1

Periodic inventory system:

The method or system of recording the transactions related to inventory occasionally or periodically are referred to as periodic inventory system.

Compute the total cost and cost of goods sold in units: 

Unit
Total
Unit
cost (S) cost ($)
Particular
(a)
(а х b)
(b)
X
January 1
August 7
$33
$264
$630
18
35
December 11
$555
15
37
Goods Available for Sale
$1,449
41
Less: Cost of goods sold
Ending inventory
25
16
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Unit Total Unit cost (S) cost ($) Particular (a) (а х b) (b) X January 1 August 7 $33 $264 $630 18 35 December 11 $555 15 37 Goods Available for Sale $1,449 41 Less: Cost of goods sold Ending inventory 25 16

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Step 2

a.

Compute the inventory cost using FIFO: 

Costs of goods sold and Ending inventory:

 

Unit Cost Cost of Goods Sold
(S)
FIFO
Units
January 1
August 7
$33
$264
8
$35
595
17
$859
Total
25
Unit Cost Ending Inventory
(S)
FIFO
Units
(S)
August 7
$35
$35
1
December 11
15
37
555
Total
16
$590
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Unit Cost Cost of Goods Sold (S) FIFO Units January 1 August 7 $33 $264 8 $35 595 17 $859 Total 25 Unit Cost Ending Inventory (S) FIFO Units (S) August 7 $35 $35 1 December 11 15 37 555 Total 16 $590

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Step 3

b.

Compute the inventory cost using LIFO:

 Costs of goods sold and E...

Unit Cost
Cost of Goods
LIFO
Units
Sold (S)
(S)
December 11
$37
$555
15
August 7
$35
10
350
$905
Total
25
Unit Cost
Ending
Inventory (S)
LIFO
Units
(S)
August 7
January 1
$35
$280
8
$33
$264
8
Total
$544
16
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Unit Cost Cost of Goods LIFO Units Sold (S) (S) December 11 $37 $555 15 August 7 $35 10 350 $905 Total 25 Unit Cost Ending Inventory (S) LIFO Units (S) August 7 January 1 $35 $280 8 $33 $264 8 Total $544 16

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