Question

Pete's Convenience Store has a beginning inventory of 12 cans of soup at a cost of $.85 each. During the year, the store purchased 4 at $.95, 6 at $1.05, 7 at $1.35, and 8 at $1.50. By the end of the year, 18 cans were sold. Calculate (A) the number of cans of soup ending inventory and (B) the cost of ending inventory under LIFO, FIFO, and weighted average. (Round your final answers to the nearest cent.)

Answer 1

A) The number of cans of soup in ending inventory is 19.

B) The cost of the ending inventory under LIFO, FIFO, and the weighted average is as follows:

LIFO                                  $17.15

FIFO                                 $25.65

Weighted average          $21.47

What are the inventory methods?

The inventory methods include First-in, First-out (FIFO), Last-in, First-out (LIFO), Weighted Average, and Specific Identification.

FIFO assumes that the physical flow of goods during sales follows the chronological sequence of their acquisition.

LIFO assumes that the first goods acquired are the last to be sold.

The Weighted Average uses an average to determine the costs allocated to ending inventory and the cost of goods sold.

Specific Identification identifies the specific goods sold with their costs.

Description                 Units Unit Cost  Total

Beginning inventory     12     $0.85     $10.20

Purchases                      4     $0.95       $3.80

Purchases                      6     $1.05        $6.30

Purchases                      7     $1.35        $9.45

Purchases                     8     $1.50       $12.00

Total                            37                     $41.75

Sales                            18

Ending inventory        19 (37 - 18)

Average cost = $1.13 ($41.75/37)

LIFO:

Ending inventory = $17.15 ($10.20 + $3.80 + 3 x $1.05)

FIFO:

Ending inventory = $25.65 (4 x $1.05 + $9.45 + $12.00)

Weighted Average

Ending inventory = $21.47 (19 x $1.13)

Learn more about the inventory methods at brainly.com/question/25056275

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