Answered Essay: Practice 9 – 7 Inventory Valuation: FIFO, LIFO and AVERAGE

Practice 9 – 7 Inventory Valuation: FIFO, LIFO and AVERAGE

The company reported the following inventory data for the year:

Description Units Cost per Unit
Beginning inventory 300 $17.50
Purchases:
   March 23 900 $18.00
   September 16 1,200 $18.25
Units remaining at year-end 400

Compute (1) cost of goods sold and (2) ending inventory assuming (a) FIFO inventory valuation, (b) LIFO inventory valuation, and (c) average cost inventory valueation. The company uses a periodic inventory system.

QUESTION 2: Inventory Valuation: FIFO, LIFO and AVERAGE (refer to Practice 9-7)

Compute the ending inventory assuming the following methods:

a. FIFO inventory valuation

b. LIFO inventory valuation

c. Average Cost Inventory valuation

The company uses a periodic inventory system.

Submit your answer in the assignment section by 11:59pm Sunday, Week 3.

Expert Answer

 

FIFO:

Beginning Inventory = 300 units
Number of units purchased = 900 + 1,200
Number of units purchased = 2,100

Number of units available for sale = Beginning Inventory + Number of units purchased
Number of units available for sale = 300 + 2,100
Number of units available for sale = 2,400

Ending Inventory = 400 units

Number of units sold = Number of units available for sale – Ending Inventory
Number of units sold = 2,400 – 400
Number of units sold = 2,000

Cost of Goods Sold = 300*$17.50 + 900*$18.00 + 800*$18.25
Cost of Goods Sold = $36,050

Ending Inventory = 400*$18.25
Ending Inventory = $7,300

LIFO:

Beginning Inventory = 300 units
Number of units purchased = 2,100
Number of units available for sale = 2,400
Ending Inventory = 400 units
Number of units sold = 2,000

Cost of Goods Sold = 1,200*$18.25 + 800*$18.00
Cost of Goods Sold = $36,300

Ending Inventory = 300*$17.50 + 100*$18.00
Ending Inventory = $7,050

Average Cost Inventory:

Beginning Inventory = 300 units
Number of units purchased = 2,100
Number of units available for sale = 2,400

Cost of Beginning Inventory = 300*$17.50
Cost of Beginning Inventory = $5,250

Cost of Goods Purchased = 900*$18.00 + 1,200*$18.25
Cost of Goods Purchased = $38,100

Cost of Goods available for sale = Cost of Beginning Inventory + Cost of Goods Purchased
Cost of Goods available for sale = $5,250 + $38,100
Cost of Goods available for sale = $43,350

Cost per unit = Cost of Goods available for sale / Number of units available for sale
Cost per unit = $43,350 / 2,400
Cost per unit = $18.0625

Cost of Goods Sold = 2,000*$18.0625
Cost of Goods Sold = $36,125

Ending Inventory = 400*$18.0625
Ending Inventory = $7,225

Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

STEP 1

Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

STEP 2

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

STEP 3

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

STEP 4

Receive your Paper

After Editing, your paper will be sent to you via email.