Problem 6-6A (Part Level Submission) You are provided with the following informa
ID: 2750041 • Letter: P
Question
Problem 6-6A (Part Level Submission) You are provided with the following information for Barton Inc. Barton Inc. uses the periodic method of accounting for its inventory transactions. March 1 Beginning inventory 2,025 liters at a cost of 59¢ per liter. March 3 Purchased 2,405 liters at a cost of 64¢ per liter. March 5 Sold 2,295 liters for $1.00 per liter. March 10 Purchased 4,165 liters at a cost of 71¢ per liter. March 20 Purchased 2,585 liters at a cost of 79¢ per liter. March 30 Sold 5,275 liters for $1.30 per liter. Calculate the value of ending inventory that would be reported on the balance sheet, under each of the following cost flow assumptions. (Round answers to 2 decimal places, e.g. 125.25.) (1) Specific identification method assuming: (i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,295 liters from the March 3 purchase; and (ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 480 liters from March 1; 595 liters from March 3; 2,900 liters from March 10; 1,300 liters from March 20. (2) FIFO (3) LIFO BARTON INC. Income Statement (partial) Specific Identification FIFO LIFO $ $ $ $ $ $
Explanation / Answer
1) Specific Identification Method
Special Identification Ending Inventory = $2564.45
2) LIFO Ending Inventory = 2025 * 0.59 + 1585 * 0.64 = $2209.15
3) FIFO Ending Inventory = 2585 * 0.79 + 1025 * 0.71 = $2769.90
Date Transaction Quantity Price 1-Mar Beginning Invetory 2025 0.59 3-Mar Purchase 2405 0.64 5-Mar Sale 2295 1 10-Mar Purchase 4165 0.71 20-Mar Purchase 2585 0.79 30-Mar Sale 5275 1.3 Quantity Total Sale 7570 Beginning Inventory + Purchases 11180 Ending Inventory 3610