In its first month of operations Bethike company made three purchases of merchandise in the...
Question:
In its first month of operations Bethike company made three purchases of merchandise in the following sequence
(1) 300 units at $6,
(2) 400 units at $7, and
(3) 200 units at $8.
Assuming there are 360 units on hand, compute the cost of the ending inventory under the FIFO method and LIFO method. Bethike uses a periodic inventory system.
Periodic Inventory Method
Under the periodic method of inventory valuation, purchases are updated as they are made but sales are only updated at the end of the period. For the purposes of calculating cost of goods sold and ending inventory, units sold can be valued from either the oldest purchases (FIFO) or the most recent purchases (LIFO).
Answer and Explanation: 1
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Ending Inventory - FIFO = $2,720
Ending Inventory - LIFO = $2,220
Solution calculations:
If there are 360 units on hand then 540 units sold (300 +...
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