Struggling in my accounting class & professor will not respond to my e-mails or
ID: 2375344 • Letter: S
Question
Struggling in my accounting class & professor will not respond to my e-mails or several of my classmates =/. Taking business courses for the first time & still having trouble with this question from an old exam - professor did not provide a key or explanation as to how to do FIFO & LIFO.
I found this site, but wasn't sure if gross margin was the same process in finding ending inventory. http://faculty.cbpp.uaa.alaska.edu/afrfb/acct201/P_5_1.htm
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THE QUESTION IS:
The following data is provided for XYZ Company:
Beginning Inventory 200 units @ 10 $ 2,000
Purchase 350 units @ 15 5,250
Purchase 450 units @ 20 9,000
Purchase 700 units @ 25 17,500
Ending units in inventory are 1,250. What is the cost of ending inventory under (1) FIFO and (2) LIFO?
(1) ____________ (2) _____________
Explanation / Answer
1. FIFO
cost of ending inventory =200*10+350*15+450*20+250*25=22500
2. LIFO=700*25+450*20+100*15=28000