Step 2 SolutionPart a. Inventory Valuation (FIFO)DatePurchase Cost of goods sold Balance MayUnitsUnit costTotal costUnitsUnit costTotal costUnitsUnit costTotal cost1 100$4$4006810$4.40$3,564 100810$4$4.40$400$3,5647 100250$4$4.40$400$1,100560$4.40$2,46410 350$4.40$1,540210$4.40$92412450$5$2,250 210450$4.40$5$924$2,25015 21040$4.40$5$924$200410$5$2,05018340$4.80$1,632 410340$5$4.80$2,050$1,63222 41040$5$4.80$2,050$192300$4.80$1,44025510$4.60$2,346 300510$4.80$4.60$1,440$2,34630 250$4.80$1,20050510$4.80$4.60$240$1,200 Ending Inventory Using FIFO = $240 + 1,200 = $1,440CAN YOU CROSS CHECK or WHY NOT LIKE THISENDING INVENTORY = (50 units@ $4.80) +(510@ $4.60)=2586

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Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Inventories

Section: Chapter Questions

Problem 7DQ: Using the following data, how should the inventory be valued under lower of cost or market? Original...

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Step 2 Solution

Part a. Inventory Valuation (FIFO)

Date	Purchase			Cost of goods sold			Balance
May	Units	Unit cost	Total cost	Units	Unit cost	Total cost	Units	Unit cost	Total cost
1							100	$4	$400
6	810	$4.40	$3,564				100 810	$4 $4.40	$400 $3,564
7				100 250	$4 $4.40	$400 $1,100	560	$4.40	$2,464
10				350	$4.40	$1,540	210	$4.40	$924
12	450	$5	$2,250				210 450	$4.40 $5	$924 $2,250
15				210 40	$4.40 $5	$924 $200	410	$5	$2,050
18	340	$4.80	$1,632				410 340	$5 $4.80	$2,050 $1,632
22				410 40	$5 $4.80	$2,050 $192	300	$4.80	$1,440
25	510	$4.60	$2,346				300 510	$4.80 $4.60	$1,440 $2,346
30				250	$4.80	$1,200	50 510	$4.80 $4.60	$240 $1,200

Ending Inventory Using FIFO = $240 + 1,200 = $1,440

CAN YOU CROSS CHECK or WHY NOT LIKE THIS

ENDING INVENTORY = (50 units@ $4.80) +(510@ $4.60)=2586

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