Please explain how to calculate the FIFO and LIFO for the below problem and to prepare the income statement for the FIFO, LIFO and Average cost.Problem: Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, prior year 1,990 $ 4 For the current year: Purchase, March 21 5,130 6 Purchase, August 1 2,920 7 Inventory, December 31, current year 4,050 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.) My calculations are below. Units Cost Per Unit Total Cost FIFO LIFO Average Cost Beginning inventory 1990 $ 4 $ 7,960 $ 7,960 $ 7,960 $ 7,960 Purchases (March 21) 5130 $ 6 $ 30,780 $ 30,780 $ 30,780 $ 30,780 Purchases (August 1) 2920 $ 7 $ 20,440 $ 20,440 $ 20,440 $ 20,440 Goods Available for sale 10040 $ 5.89 $ 59,180 $ 59,180 $ 59,180 $ 59,180 Ending Inventory 4050 $ 5.89 $ 20,440 $ 30,780 $ 23,872 Cost of goods Sold 5990 $ 5.89 $ 38,740 $ 28,400 $ 35,308 Calculation Avg Costs: Avg Costs = Goods Available for Sale / Number of Units Available for Sale = $59,180/ 10040 = $5.89= Avg costs * EI = $5.89 * 4050 = $23872CGS = Goods Available for Sale - EI = $59180 - $23,872 = $35,308
Please explain how to calculate the FIFO and LIFO for the below problem and to prepare the income statement for the FIFO, LIFO and Average cost.
Problem:
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1:
Units | Unit Cost | ||||
Inventory, December 31, prior year | 1,990 | $ | 4 | ||
For the current year: | |||||
Purchase, March 21 | 5,130 | 6 | |||
Purchase, August 1 | 2,920 | 7 | |||
Inventory, December 31, current year | 4,050 | ||||
Required:
Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.)
Units | Cost Per Unit | Total Cost | FIFO | LIFO | Average Cost | |
Beginning inventory | 1990 | $ 4 | $ 7,960 | $ 7,960 | $ 7,960 | $ 7,960 |
Purchases (March 21) | 5130 | $ 6 | $ 30,780 | $ 30,780 | $ 30,780 | $ 30,780 |
Purchases (August 1) | 2920 | $ 7 | $ 20,440 | $ 20,440 | $ 20,440 | $ 20,440 |
Goods Available for sale | 10040 | $ 5.89 | $ 59,180 | $ 59,180 | $ 59,180 | $ 59,180 |
Ending Inventory | 4050 | $ 5.89 | $ 20,440 | $ 30,780 | $ 23,872 | |
Cost of goods Sold | 5990 | $ 5.89 | $ 38,740 | $ 28,400 | $ 35,308 |
Calculation Avg Costs:
Avg Costs = Goods Available for Sale / Number of Units Available for Sale
= $59,180/ 10040 = $5.89
= Avg costs * EI = $5.89 * 4050 = $23872
CGS = Goods Available for Sale - EI = $59180 - $23,872 = $35,308
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