00:01
In the first month of operation, bonita company made three purchases of merchandise in the following sequence.
00:07
She made 350 units of 7, 470 units of 8 and then 220 units of 9.
00:23
Now assuming that there are 390 units on hand, compute the cost of any inventory under the fifo and lifo method if she uses a periodic inventory system.
00:39
So to compute the cost of the ending inventory under the first in first out and last in first out method, we use the periodic inventory system.
00:50
So for the first in first out, under this method we are assuming that the first units purchased are the first ones sold.
00:59
So the cost of the ending inventory is based on the cost of the most recent purchases.
01:05
So to calculate the cost of goods sold, this is the cost of the first purchase, cost of first purchase plus cost of second purchase until all units are covered.
01:23
So this is going to be 350 units times $7 plus 40 units times $8 plus.
01:36
So this is going to be 470 not 40.
01:40
So to be 470 times 8 plus 220 times 9.
01:48
So this is going to be 2730 plus 2450 plus 3760.
01:58
We're going to add on the beginning inventory, which is we have 390 times 7, which is 1980.
02:10
So the total cost of goods available for sale will be $10 ,920.
02:15
So now for the cost of ending inventory, the ending inventory on the first in first out, we're assuming that the first items purchased are the first items sold.
02:30
So the ending inventory consists of the most recent purchase and then earlier purchases...