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Trini Company had the following transactions for the month. Calculate the ending inventory dollar value for each of the following cost allocation methods, using periodic inventory updating. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 10, Problem 2PA
Textbook Problem
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Trini Company had the following transactions for the month.

Chapter 10, Problem 2PA, Trini Company had the following transactions for the month. Calculate the ending inventory dollar

Calculate the ending inventory dollar value for each of the following cost allocation methods, using periodic inventory updating. Provide your calculations.

A. first-in, first-out (FIFO)

B. last-in, first-out (LIFO)

C. weighted average (AVG)

To determine

(a)

Concept introduction:

FIFO (First in first out): In FIFO Method, company issues that material first, which is purchased earliest. This method provides highest gross margin in case of inflation.

LIFO (Last in first out): In LIFO Method,company issues first that material which comes in last in inventory. This method provides least gross margin in case of inflation.

Weighted average method: In this method, we issue material on random basis, so every type of goods has equal probability.

To calculate:

Value of inventory as per FIFO method.

Explanation of Solution

Inventory as per FIFO method= No. of units × cost per unit(from last)

       &ems...

To determine

(b)

Concept introduction:

LIFO (Last in first out): In LIFO Method,company issues first that material which comes in last in inventory. This method provides least gross margin in case of inflation.

To calculate:

Value of inventory as per LIFO method.

To determine

(c)

Concept introduction:

Weighted average method: In this method, material is issued on random basis.So, every type of goods has equal probability.

To calculate:

Value of inventory as per weighted average method.

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Chapter 10 Solutions

Principles of Accounting Volume 1
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