Answer:
a. Ending inventory under FIFO = $1,071,000
b. Ending inventory value under LIFO = $1,036,500
Explanation:
The data are merged together in the question and they are first separated before the questions are answered as follows:
Beginning inventory: 8,400 units at $200
Sale: 5,500 units at $300
First purchase: 14,500 units at $205
Sale: 13,400 units at $300
Second purchase: 15,500 units at $210
Sale: 14,400 units at $300
Number units available for sale = 8,400 + 14,500 + 15,500 = 38,400 units
Number of units sold = 5,500 + 13,400 + 14,400 = 33,300 units
a. What is the total cost of the ending inventory according to FIFO? Round your answer to the nearest dollar. $ 3,255,000 X
Since second purchase is 15,500 units and last sales is 14,400, the 5,100 closing stock must be from the last purchases. Therefore we have:
Ending inventory under FIFO = 5,100 * $210 = $1,071,000
b. What is the total cost of the ending inventory according to LIFO?
Beginning inventory balance after first sale = 8,400 - 5,500 = 2,900
Second sale distribution = 100% from first purchase = 13,400
First Purchase balance = 14,500 - 13,400 = 1,100
Third sale distribution = 100% from second purchase = 14,400
Second Purchase balance = 15,500 - 14,400 = 1,100
Ending inventory value under LIFO = (2,900 * $200) + (1,100 * $205) + (1,100 * $210) = $1,036,500
