Assuming that periodic inventory records are kept in units only, compute the inventory at April 30 using LIFO and average-cost. **Bonita Company’s Transaction Records for April**The following table details Bonita Company's transactions for the month of April, categorizing them into purchases and sales:**Purchases:**- **April 1** (balance on hand): 780 units @ $5.90- **April 4**: 1,950 units @ $6.00- **April 8**: 1,040 units @ $6.30- **April 13**: 1,560 units @ $6.40- **April 21**: 910 units @ $6.50- **April 29**: 650 units @ $6.70_Total Purchases: 6,890 units_**Sales:**- **April 3**: 650 units @ $10.00- **April 9**: 1,820 units @ $10.00- **April 11**: 780 units @ $11.00- **April 23**: 1,560 units @ $11.00- **April 27**: 1,170 units @ $12.00_Total Sales: 5,980 units_Each entry indicates the date of the transaction, quantity of items, and the price per unit. The purchases and sales data provide an overview of the movement of goods and the pricing strategy for the company throughout the month.

Under the periodic system, inventory are valued at the end of the period instead of valuing after each transaction as in the case of perpetual inventory system.Working :- 1) Calculation of inventory units at April 30 :- Total purchase units including balance on hand on April 1 - sales units = 6,890 units - 5,980 units = 910 units Requirement :- Computation of inventory value using LIFO method :- under LIFO method, ending inventory is valued on the price of old goods or goods which was purchased earlier. Accordingly, out of 910 units, 780 units are valued at $5.90 (beginning inventory price) and remaining 130 units (910 units - 780 units) are valued at $6.00 (purchase price of april 4) Hence, Inventory value :- = (780 units * $5.90) + (130 units * $6.00) = $4,602 + $780 = $5,382Computation of inventory value using average cost :- working 2) Calculation of average cost per unit :- Calculation of average cost per unit Date Units unit price Total cost April 1 780 $5.90 $4,602.00 4 1,950 $6.00 $11,700.00 8 1,040 $6.30 $6,552.00 13 1,560 $6.40 $9,984.00 21 910 $6.50 $5,915.00 29 650 $6.70 $4,355.00 Total 6,890 $43,108.00 Average cost per unit :- Total cost / total units = $43,108 / 6,890 units = $6.26 Inventory value :- Inventory units at April 30 * average cost per unit = 910 units * $6.26 = $5,696.60Conclusion :- Inventory value using ; LIFO = $5,382 Average cost = $5,696.60

Business

Accounting

Bonita Company's record of transactions for the month of April was as follows. April 1 (balance on hand) 4 8 13 21 Purchases 29 780 @ $5.90 1,950 @ 1,040 @ 1,560 @ 910 @ 6,890 6.00 6.30 6.40 6.50 650 @ 6.70 April 3 9 11 23 27 Sales 650 1,820 @ @ $10.00 780 @ 1,560 @ 1,170 5,980 10.00 11.00 11.00 12.00

Bonita Company's record of transactions for the month of April was as follows. April 1 (balance on hand) 4 8 13 21 Purchases 29 780 @ $5.90 1,950 @ 1,040 @ 1,560 @ 910 @ 6,890 6.00 6.30 6.40 6.50 650 @ 6.70 April 3 9 11 23 27 Sales 650 1,820 @ @ $10.00 780 @ 1,560 @ 1,170 5,980 10.00 11.00 11.00 12.00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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