Question

Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 2,500 units at $5 Feb. 17 Purchase 3,300 units at $6 July 21 Purchase 3,000 units at $7 Nov. 23 Purchase 1,200 units at $8 There are 1,500 units of the item in the physical inventory at December 31. The periodic inventory system is used. a. Determine the inventory cost by the first-in, first-out method. $ b. Determine the inventory cost by the last-in, first-out method. $ c. Determine the inventory cost by the weighted average cost method. $

Answer 1

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Jan. 1 Inventory 2,500 units at $5

Feb. 17 Purchase 3,300 units at $6

July 21 Purchase 3,000 units at $7

Nov. 23 Purchase 1,200 units at $8

There are 1,500 units of the item in the physical inventory on December 31.

A) FIFO:

Inventory= 1200* 8 + 300*7= $11,700

B) LIFO

Inventory= 1500*5= $7,500

C) weighted average cost method:

Total period inventory= 2500*5 + 3300*6 + 3000*7 + 1200*8= 62900/ 10000 units= 6.29

Inventory= 1500*6.29= 9,435