Chapter 6, Problem 15E

Periodic: Cost flow assumptions

Flora’s Gifts reported the following current-month data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 60 units—50 units from the January 6 purchase and 10 units from the January 25 purchase. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO. (Round per unit costs and inventory amounts to cents.) Which method yields the lowest net income?

Jan	1	Beginning inventory...........	138 units @ $3.00 = $ 414
Jan.	6	Purchase....................	300 units @ $2.80= 840
Jan.	17	Purchase....................	540 units @ $2.30= 1,242
Jan.	2S	Purchase....................	22 units @ $2.00 = 44
		Totals.......................	1.000 units $2.540

Check Inventory: LIFO, $180.00; FIFO, $131.40