The units of an item available for sale during the year were as follows:Jan. 1                               Inventory                           1,000 units at $120Feb. 17                            Purchase                            1,375 units at $128July 21                            Purchase                             1,500 units at $136Nov. 23                          Purchase                              1,125 units at $140There are 1,200 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost by (a) the first-in, first-out method; (b) the last-in, first-out method; and (c) the weighted average cost method.

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Asked Dec 14, 2019
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The units of an item available for sale during the year were as follows:
Jan. 1                               Inventory                           1,000 units at $120
Feb. 17                            Purchase                            1,375 units at $128
July 21                            Purchase                             1,500 units at $136
Nov. 23                          Purchase                              1,125 units at $140
There are 1,200 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost by (a) the first-in, first-out method; (b) the last-in, first-out method; and (c) the weighted average cost method.

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Expert Answer

Step 1

a.

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Ending inventory (FIFO) |(1,125 units * $140)+ (75 units * $136) $157,500+$10,200 $167,700

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Step 2

b.

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Ending inventory (LIFO) (1,000 units * $120) + (200 units * $128) $120,000+$25,600 $145,600

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Step 3

c.

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Ending inventory ( Weighted average) (1,200 units * $131.50) $157,800

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