Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 2,500 units at $5 Feb. 17 Purchase 3,300 units at $6 July 21 Purchase 3,000 units at $7 Nov. 23 Purchase 1,200 units at $8 There are 1,500 units of the item in the physical inventory at December 31. The periodic inventory system is used. a. Determine the inventory cost by the first-in, first-out method. $ b. Determine the inventory cost by the last-in, first-out method. $ c. Determine the inventory cost by the weighted average cost method. $

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Business

Valeria Ray

28 November, 06:29

Periodic Inventory by Three Methods The units of an item available for sale during the year were as follows: Jan. 1 Inventory 2,500 units at $5 Feb. 17 Purchase 3,300 units at $6 July 21 Purchase 3,000 units at $7 Nov. 23 Purchase 1,200 units at $8 There are 1,500 units of the item in the physical inventory at December 31. The periodic inventory system is used. a. Determine the inventory cost by the first-in, first-out method. $ b. Determine the inventory cost by the last-in, first-out method. $ c. Determine the inventory cost by the weighted average cost method. $

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Answers (1)

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Cortez Daugherty · Answer 1

Instructions are listed below

Explanation:

Giving the following information:

Jan. 1 Inventory 2,500 units at $5

Feb. 17 Purchase 3,300 units at $6

July 21 Purchase 3,000 units at $7

Nov. 23 Purchase 1,200 units at $8

There are 1,500 units of the item in the physical inventory on December 31.

A) FIFO:

Inventory = 1200 * 8 + 300*7 = $11,700

B) LIFO

Inventory = 1500*5 = $7,500

C) weighted average cost method:

Total period inventory = 2500*5 + 3300*6 + 3000*7 + 1200*8 = 62900 / 10000 units = 6.29

Inventory = 1500*6.29 = 9,435