For the given data, calculate the ending inventory value using the FIFO and LIFO
ID: 2459284 • Letter: F
Question
For the given data, calculate the ending inventory value using the FIFO and LIFO methods, assuming a periodic record-keeping method.
Calculate sales, cost of goods sold, and gross margin for each inventoryvaluation method, assuming that the sale price from the local auto parts store to the end customer is $43 per gasket. Make sure you explain how you arrive at your solution.
Beginning inventory January 1st: 500 units at a price of $20 Purchases in January: 100 units at a price of $22 Purchases in February: 225 units at a price of $24.50 Purchases in March: 200 units at a price of $2Explanation / Answer
Answer: The physical count of cylinders is 327.
Begining balance (500*20)..........................10000
Purchases in january(100*22)......................2200
Purchases in february (225*24.50) ..............5512.5
Purchases in march(200*2)........................400
Total units (1025)......................................18112.5
LIFO method valuation:
Cost of ending inventory according to LIFO method = 327*20 = $ 6540
FIFO method valuation:
Cost of goods sold - LIFO method Beginning inventory $ 10,000.00 Purchases during the year $ 8,112.50 Cost of goods available for sale $ 18,112.50 Ending inventory $ 6,540.00 Cost of goods sold $ 11,572.50