Please explain how to calculate the FIFO and LIFO for the below problem and to prepare the income statement for the FIFO, LIFO and Average cost.Problem: Nittany 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 1,990 $ 4 For the current year: Purchase, March 21 5,130 6 Purchase, August 1 2,920 7 Inventory, December 31, current year 4,050 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.) My calculations are below. Units Cost Per Unit Total Cost FIFO LIFO Average Cost Beginning inventory 1990 $ 4 $ 7,960 $ 7,960 $ 7,960 $ 7,960 Purchases (March 21) 5130 $ 6 $ 30,780 $ 30,780 $ 30,780 $ 30,780 Purchases (August 1) 2920 $ 7 $ 20,440 $ 20,440 $ 20,440 $ 20,440 Goods Available for sale 10040 $ 5.89 $ 59,180 $ 59,180 $ 59,180 $ 59,180 Ending Inventory 4050 $ 5.89 $ 20,440 $ 30,780 $ 23,872 Cost of goods Sold 5990 $ 5.89 $ 38,740 $ 28,400 $ 35,308 Calculation Avg Costs: Avg Costs = Goods Available for Sale / Number of Units Available for Sale = $59,180/ 10040 = $5.89= Avg costs * EI = $5.89 * 4050 = $23872CGS = Goods Available for Sale - EI = $59180 - $23,872 = $35,308

Please explain how to calculate the FIFO and LIFO for the below problem and to prepare the income statement for the FIFO, LIFO and Average cost.Problem: Nittany 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 1,990 $ 4 For the current year: Purchase, March 21 5,130 6 Purchase, August 1 2,920 7 Inventory, December 31, current year 4,050 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.) My calculations are below. Units Cost Per Unit Total Cost FIFO LIFO Average Cost Beginning inventory 1990 $ 4 $ 7,960 $ 7,960 $ 7,960 $ 7,960 Purchases (March 21) 5130 $ 6 $ 30,780 $ 30,780 $ 30,780 $ 30,780 Purchases (August 1) 2920 $ 7 $ 20,440 $ 20,440 $ 20,440 $ 20,440 Goods Available for sale 10040 $ 5.89 $ 59,180 $ 59,180 $ 59,180 $ 59,180 Ending Inventory 4050 $ 5.89 $ 20,440 $ 30,780 $ 23,872 Cost of goods Sold 5990 $ 5.89 $ 38,740 $ 28,400 $ 35,308 Calculation Avg Costs: Avg Costs = Goods Available for Sale / Number of Units Available for Sale = $59,180/ 10040 = $5.89= Avg costs * EI = $5.89 * 4050 = $23872CGS = Goods Available for Sale - EI = $59180 - $23,872 = $35,308

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter27: Adjustments, Financial Statements, And Year-end Accounting For A Manufacturing business

Section: Chapter Questions

Problem 1MP: Reese Manufacturing Company manufactures and sells a limited line of products made to customer...

See similar textbooks

Related questions

Concept explainers

Question

Practice Pack

Please explain how to calculate the FIFO and LIFO for the below problem and to prepare the income statement for the FIFO, LIFO and Average cost.

Problem:

Nittany 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	1,990		$	4
For the current year:
Purchase, March 21	5,130			6
Purchase, August 1	2,920			7
Inventory, December 31, current year	4,050

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.)

My calculations are below.

	Units	Cost Per Unit	Total Cost	FIFO	LIFO	Average Cost
Beginning inventory	1990	$ 4	$ 7,960	$ 7,960	$ 7,960	$ 7,960
Purchases (March 21)	5130	$ 6	$ 30,780	$ 30,780	$ 30,780	$ 30,780
Purchases (August 1)	2920	$ 7	$ 20,440	$ 20,440	$ 20,440	$ 20,440
Goods Available for sale	10040	$ 5.89	$ 59,180	$ 59,180	$ 59,180	$ 59,180
Ending Inventory	4050	$ 5.89		$ 20,440	$ 30,780	$ 23,872
Cost of goods Sold	5990	$ 5.89		$ 38,740	$ 28,400	$ 35,308

Calculation Avg Costs:
Avg Costs = Goods Available for Sale / Number of Units Available for Sale
= $59,180/ 10040 = $5.89
= Avg costs * EI = $5.89 * 4050 = $23872
CGS = Goods Available for Sale - EI = $59180 - $23,872 = $35,308

Expert Solution

Trending now

This is a popular solution!

Learn your way

Includes step-by-step video

Step by step

Solved in 9 steps with 8 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.