The Following Data Regarding Purchases and Sales of a Commodity

question 154

Essay

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:? $$\begin{array} { r l l } \text { June } 1 & \text { Balance } & 25 \text { units at } \$ 60 \\6 & \text { Sale } & 20 \text { units } \\8 & \text { Purchase } & 20 \text { units at } \$ 61 \\16 & \text { Sale } & 10 \text { units } \\20 & \text { Purchase } & 20 \text { units at } \$ 62 \\23 & \text { Sale } & 25 \text { units } \\30 & \text { Purchase } & 15 \text { units at } \$ 63\end{array}$$ Calculate the cost of the ending inventory at June 30, using
(a) the first-in, first-out
(FIFO) method and
(b) the last-in, first-out
(LIFO) method. Identify the quantity, unit price, and total cost of each lot in the inventory.

---

Definitions:

Current Ratio

This ratio evaluates a corporation's potential to meet its immediate financial obligations, by dividing the total of current assets by the total of current liabilities.

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its most liquid assets.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a certain period, indicating the efficiency of inventory management.