# DeForest Company had the following transactions for the month. Calculate the ending inventory dollar value for the period 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

#### Solutions

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 10, Problem 2PB
Textbook Problem
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## DeForest Company had the following transactions for the month.Calculate the ending inventory dollar value for the period 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

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.

Requirement-1:

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)

&emsp...

To determine

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.

Requirement-2:

To calculate:

Value of inventory as per LIFO method.

To determine

Concept introduction:

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

Requirement-3:

To calculate:

Value of inventory as per weighted average method.

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