Tevin Trader starts a merchandising business on December 1 and enters into three inventory purchases?

Question

Tevin Trader starts a merchandising business on December 1 and enters into three inventory purchases:

Tevin Trader starts a merchandising business on December 1 and enters into three inventory purchases:

December 7 10 units @ $ 6 cost

December 14 20 units @ $12 cost

December 21 15 units @ $14 cost

Trader sells 15 units for $25 each on December 15. Eight of the sold units are from the December 7

purchase and seven are from the December 14 purchase. Trader uses a perpetual inventory system.

Determine the costs assigned to the December 31 ending inventory when costs are assigned based on

(a) FIFO, (b) LIFO, (c) weighted average, and (d ) specific identification.

I am struggling so much with this can anyone help me out? I do most of it but want to make I did it right...

Answer 1

FIFO means first-in-first-out: The first 15 units sold are costed at $6 for the first 10 and $12 for the remaining 5. Total cost of goods sold is $120.

LIFO means last-in-first-out: The 15 units sold are costed at $14 each. Total cost of goods sold is $210.

Weighted average means that all units are costed at [(10 * 6) + (20 * 12) + (15 * 14)] / 45 dollars. Total cost-of good sold is 15 * $11.33 = $170.

Specific identification bases the costing on the actual costs of the items which were sold: 8 are costed at $6 (Dec 7 units) and the remaining 7 are costed at $12 (Dec14 units). Total cost of goods sold is $48 + $84 = $132.

[added]

For inventory costing purposes, the Dec 31 inventory value is the total purchase price ($510) minus the above figures.

Answer 2

I did it in Excel and have sent the file to you.