I\'m using Accounting 23e by Warren Reeve Duchac. The question is EX 7-7 The fol
ID: 2443874 • Letter: I
Question
I'm using Accounting 23e by Warren Reeve Duchac.The question is EX 7-7
The following units of a particular items were avaible for sale during the year.
Beginning Inventory 150 units at $75
Sales 120 units at $125
First Purchase 400 units at $78
Sale 200 units at $125
Second Purchase 300 units at $80
Sale 290 units at $125
The firm uses the perpetual inventory system, and there are 240 units of item on hand at the end of the year. What is the total cost of the ending inventory according to a.) FIFO b.) LIFO?
Explanation / Answer
FIFO
LIFO
Transaction
Units
Cost
Units
Cost
Total
Units
Cost
Total
Beginning
150
75
150
75
11250
150
75
11250
Sale
120
30
75
2250
30
75
2250
Purchase
400
78
30
75
2250
30
75
2250
400
78
31200
400
78
31200
Sale
200
230
78
17940
30
75
2250
200
78
15600
Purchase
300
80
230
78
17940
30
75
2250
300
80
24000
200
78
15600
300
80
24000
Sale
290
240
80
19200
30
75
2250
200
78
15600
10
80
800
Total
240
19200
240
18650
FIFO
LIFO
Transaction
Units
Cost
Units
Cost
Total
Units
Cost
Total
Beginning
150
75
150
75
11250
150
75
11250
Sale
120
30
75
2250
30
75
2250
Purchase
400
78
30
75
2250
30
75
2250
400
78
31200
400
78
31200
Sale
200
230
78
17940
30
75
2250
200
78
15600
Purchase
300
80
230
78
17940
30
75
2250
300
80
24000
200
78
15600
300
80
24000
Sale
290
240
80
19200
30
75
2250
200
78
15600
10
80
800
Total
240
19200
240
18650