Chapter 5, Problem 5.32P

Problem 5.32

LO 7, 8

Cost flow assumptions-FIFO, LIFO, and weighted average using a periodic system The following data are available for Sellco for the fiscal year ended on January 31, 2017:

Sales	3,200 units
Beginning inventory	1,000 units @ $8
Purchases, in chronological order	1,200 units @ $10

1,600 units @ $12

800 units @ $16

Required:

a. Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system):

1. FIFO.
2. LIFO.
3. Weighted average. Round the unit cost answer to two decimal places and ending inventory to the nearest $10.

b. Assume that net income using the weighted-average cost flow assumption is $232,000. Calculate net income under FIFO and LIFO.