When the merchandise manager for Ritz Fashions (Exercise 3) took physical inventory on December 31, 128 silk ties remained in inventory.
Calculate the dollar value of the 128 ties by using FIFO.
Calculate the dollar value of the 128 ties by using LIFO.
Calculate the dollar value of the 128 ties by using the average cost method.
Calculate the total number of imported silk ties available for sale and the cost of goods available for sale from the following inventory figures for Ritz Fashions. Inc.
UnitsDate Purchased | Cost perUnit Total Cost | |
Beginning Inventory, January 1 | 59 | $46.10 |
Purchase. March 29 | 75 | 43.50 |
Purchase. July 14 | 120 | 47.75 |
Purchase. October 12 | 95 | 50.00 |
Purchase. December 8 | 105 | 53.25 |
Total Units Available | Cost of Goods Available for Sale |
(a)
To calculate: The dollar value of the 128 ties with the help of FIFO method of inventory pricing for Ritz Fashion, Inc.
Given Information:
It is given that when the buyer took physical inventory of the washing machines on December 31, 128 units remained in the inventory.
The information of the inventory is given as follows in the table:
Formula used:
Use following steps for FIFO method of inventory pricing-
Step1. Write the list of the number of units on hand at the end of the year and their corresponding costs starting with the ending balance and then work backward through the income shipments.
Step2. Multiply the number of units by the corresponding cost per units for each purchase.
Step3. Calculate the value of ending inventory by totaling the extension from step 2.
Calculation:
To calculate the dollar value of ending inventory by using FIFO,
List the ending inventory with cost in reverse order of acquisition.
And multiply the units with per unit cost as,
Now add all values of cost as,
(b)
To calculate: The dollar value of 128 ties with the help of LIFO method of inventory pricing.
(c)
To calculate: The dollar value of 128 ties with the help of average cost method.
The table is given as follows:
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