Chapter 7, Problem 7.5E

Calculating Ending Inventory and Cost of Goods Sold under FIFO, LIFO, and Average Cost

LO7-2 Penn 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	2,000	$5
For the current year
Purchase, March 21	5,000	6
Purchase, August 1	3,000	8
Inventory, December 31, current year	4,000

Required:

Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Hint: Set up adjacent columns for each case.)