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

question 89

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.)
$$\begin{array} { l c l l r } \text { Jan. } & 1 & \text { Beginning inventory } & 100 \text { items @ } \$ 4 = & \$400 \\\text { July } & 1 & \text { Purchases } & \underline { 300 } \text { items } @ \$ 8 = & 2,400 \\& & \text { Totals } & 400 \text { items } &\$2,800 \\& & \text { Total sales } & \underline { 240 } \text { items } & \\\text { Dec. } & 31 & \text { Ending inventary } & \underline { 160 } \text { items } &\end{array}$$

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Definitions:

Cash Flow Statement

A statement that shows the cash on hand at the beginning of a period, the income and disbursements made during the period, and the new amount of cash on hand at the end of the period.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.

Dollar Value

Dollar value is the worth of an item or service expressed in terms of money.

Geographic Area

A specific physical location defined by natural or artificial boundaries.