Question

Marvin Company has a beginning inventory of 12 sets of paints at a cost of $1.50 each. During the year, the store purchased 4 sets at $1.60, 6 sets at $2.20, 6 sets at $2.50, and 10 sets at $3.00. By the end of the year, 25 sets were sold. Calculate (a) the number of paint sets in ending inventory and (b) the cost of ending inventory under the LIFO, FIFO, and weighted-average methods. Round to nearest cent for the weighted average

Answer 1

Answer:

(a) 13

(b) LIFO: $19.60; FIFO: $37.50; Avg: $28.26

Step-by-step explanation:

(a) The starting inventory was 12 sets. Added to that were 4, 6, 6, 10, to make a total of 38 paint sets. 25 were sold, so 13 remained at the end of the year.

(b)

LIFO

Sets purchased at the end of the year are sold first (last-in, first-out). So the sets remaining in inventory are the ones purchased at the beginning of the year. Those 13 sets cost [email protected] [email protected] = $19.60.

FIFO

Sets purchased first are sold first, so the sets remaining in inventory are the ones purchased last. Those 13 sets cost [email protected] [email protected] = $37.50.

Avg

The total cost of all inventory purchases was ...

... [email protected] [email protected] [email protected] [email protected] [email protected]

... = 18.00 +6.40 +13.20 +15.00 +30.00 = $82.60

Then the value of the remaining 13 of the 38 items bought is ...

... (13/38)·$82.60 = $28.26.

_____

I find it convenient to let a spreadsheet do the arithmetic.

Answer 2

Q. P

12. 1.5. 18.00

4. 1.6. 6.40

6. 2.2. 13.20

6. 2.5. 15

10. 3. 30

__ __. ___

38. 10.8. 82.6

Sales. 25

Ending inventory 25-38=13. Answer a

B) ending inventory under LIFO

12×1.5=18

1×1.6=1.6

___

19.6 Answer

Ending inventory under FIFO

10×3=30

3×2.5=7.5

___

37.5. Answer

Ending inventory under weighted average

82.6÷38=2.17

2.17× 13=28.21 ...Answer

Hope it helps!