Required information Problem 6-2AA Periodic: Alternative cost flows LO P3 [The following information applies to the questions displayed below.] Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March. Activities Mar. 1 Beginning inventory 5 Purchase 9 Sales Units Acquired at Cost 110 units @ $45 per unit 410 units @ $50 per unit Date Units Sold at Retail Mar. 430 units @ $80 per unit Mar. Mar. 18 Purchase 140 units @ $55 per unit 220 units @ $57 per unit Mar. 25 Purchase Mar. 29 Sales 180 units @ $90 per unit 610 units Totals 880 units For specific identification, the March 9 sale consisted of 60 units from beginning inventory and 370 units from the March 5 purchase; the March 29 sale consisted of 50 units from the March 18 purchase and 130 units from the March 25 purchase. Problem 6-2AA Part 3 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round your average cost per unit to 2 decimal places.) a) Periodic FIFO Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory Cost of Goods Available for Sale Cost of # of units # of units Cost per unit # of units Cost per sold in ending Cost per unit Ending Inventory Goods unit Sold inventory Beginning inventory Purchases: 0.00 S 0.00 S March 5 0.00 0.00 March 18 0.00 2$ 0.00 March 25 0.00 Total

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.