March 2 Beginning Inventory 120 units @ $4.00 March 5 Purchases 500 @ $4.50 Marc
ID: 2508622 • Letter: M
Question
March 2
Beginning Inventory
120 units @ $4.00
March 5
Purchases
500 @ $4.50
March 8
Sale
300 units
March 19
Purchases
200 units @ $4.75
March 30
Sale
400 units
LIFO calculation: Balance of ending inventory in $.
LIFO calculation: Total Cost of Goods Sold.
FIFO calculation: Balance of ending inventory in $.
FIFO calculation: Total Cost of Goods Sold.
Calculation of inventory value using Lower of Cost or Market (LCM) method. Mattie Company produces 4 types of dog food and shows the following value of inventory. If Mattie applies the LCM method, what is the value of the inventory that should be shown on the balance sheet?
Product
Cost
Market
Super Star
$64,000
$61,000
Happy Dog
$290,000
$260,000
Lazy Dog
$152,000
$167,000
Puppy
$50,000
$32,000
QUESTION: If Mattie applies the LCM method, what is the value of the inventory that should be shown on the balance sheet?
March 2
Beginning Inventory
120 units @ $4.00
March 5
Purchases
500 @ $4.50
March 8
Sale
300 units
March 19
Purchases
200 units @ $4.75
March 30
Sale
400 units
Explanation / Answer
Q1. STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 2-Mar 120 4 480 5-Mar 500 4.5 2250 120 4 480 500 4.5 2250 8-Mar 120 4 480 320 4.5 1440 180 4.5 810 19-Mar 200 4.75 950 320 4.5 1440 200 4.75 950 30-Mar 320 4.5 1440 80 4.75 380 120 4.75 570 TOTAL 700 3200 700 3110 120 570 STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 2-Mar 120 4 480 5-Mar 500 4.5 2250 120 4 480 500 4.5 2250 8-Mar 300 4.5 1350 120 4 480 200 4.5 900 19-Mar 200 4.75 950 120 4 480 200 4.5 900 200 4.75 950 30-Mar 200 4.75 950 200 4.5 900 120 4 480 TOTAL 700 3200 700 3200 120 480 LIFO ENDING Inventory: 480 LIFO COGS: 3200 FIFO Ending Inventory: 570 FIFO COGS: 3110 Q2. STATEMENT SHOWING INVENTORY VALUATION: Product Cost market value Inventory valuation Super star 64000 61000 61000 happy dog 290000 260000 260000 Lazy dog 152000 167000 152000 Puppy 50000 32000 32000 Inventory Valuation 505000