Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 50 units @ $102 Mar. 10 Purchase 60 units @ $114 Aug. 30 Purchase 20 units @ $122 Dec. 12 Purchase 70 units @ $128 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar. Cost of Merchandise Inventory and Cost of Merchandise Sold Inventory Method Merchandise Inventory Merchandise Sold First-in, first-out (FIFO) $fill in the blank 1 $fill in the blank 2 Last-in, first-out (LIFO) fill in the blank 3 fill in the blank 4 Weighted average cost fill in the blank 5
Periodic Inventory by Three Methods; Cost of Merchandise Sold
The units of an item available for sale during the year were as follows:
| Jan. 1 | Inventory | 50 units @ $102 |
| Mar. 10 | Purchase | 60 units @ $114 |
| Aug. 30 | Purchase | 20 units @ $122 |
| Dec. 12 | Purchase | 70 units @ $128 |
There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.
Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.
| Cost of Merchandise Inventory and Cost of Merchandise Sold | ||
| Inventory Method | Merchandise Inventory | Merchandise Sold |
| First-in, first-out (FIFO) | $fill in the blank 1 | $fill in the blank 2 |
| Last-in, first-out (LIFO) | fill in the blank 3 | fill in the blank 4 |
| Weighted average cost | fill in the blank 5 |
LIFO means last in first out where as FIFO means first in first out.
Inventory and cost of goods sold can be value on the basis of FIFO or LIFO basis.
In LIFO , cost of goods sold is valued at latest price and closing inventory at oldest price.
In FIFO , cost of goods sold is valued at oldest price and closing inventory at latest price.
In weighted average , an average price is calculated by taking quantity as weight and cost of goods sold and closing inventory is valued at that price.
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