Given the Following Information About Purchases and Sales During the Year,compute

question 128

Essay

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost,(b)FIFO,and (c)LIFO.Assume the periodic inventory system is used.(Show your work.)
$$\begin{array} { l c l l r } \text { Jan. } & 1 & \text { Beginning inventory } & 100 \text { items @ } \$ 4 = & 400 \\\text { July } & 1 & \text { Purchases } & \underline { 300 } \text { items } @ \$ 8 = & 2,400 \\& & \text { Totals } & 400 \text { items } & \$2,800\\& & \text { Total sales } & \underline { 240 } \text { items } & \\\text { Dec. } & 31 & \text { Ending inventary } & \underline { 160 } \text { items } &\end{array}$$

---

Definitions:

Quantity Supplied

The amount of a good that producers are willing and able to sell at a given price over a certain period of time.

Company Profits

The financial gain that a company achieves after all expenses, taxes, and costs have been subtracted from total revenue.

Time-Series Graph

A two-variable graph that has dates on the horizontal axis and values of a variable that occurred on those dates on the vertical axis.

Seasonally Adjusted

A statistical technique used to remove seasonal variations from a data series to more clearly analyze trends.