Question

Use the information below to answer the following questions. The following units of an inventory item were available for sale during the year: Beginning inventory 10 units at $55 First purchase 25 units at $60 Second purchase 30 units at $65 Third purchase 15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold.
a. Calculate the value of ending inventory using FIFO.
b. Calculate the value of ending Inventory using LIFO.
c. Calculate the value of ending inventory using Weighted Average

Answer 1

Answer:

Instrctions are listed below.

Explanation:

Giving the following information:

Beginning inventory 10 units at $55

First purchase 25 units at $60

Second purchase 30 units at $65

Third purchase 15 units at $70

60 units of the item were sold.

A) FIFO

Inventory= 15*70 + 5*65= $1,375

B) LIFO

Inventory= 10*55 + 10*60= $1,150

C) Weighted average:

Average cost= (55 + 60 + 65 + 70)/4= 62.5

Inventory= 62.5*20= $1,250