Question

Crane Co. uses a periodic inventory system. Its records show the following for the month of May, in which 68 units were sold. Units Unit Cost Total Cost May 1 Inventory 31 $5 $155 15 Purchases 27 $8 $216 24 Purchases 32 $9 $288 Totals 90 $659 Compute the ending inventory at May 31 and cost of goods sold using the FIFO and LIFO methods. Ending inventory at May 31: FIFO $___ LIFO $_ Cost of goods sold: FIFO $_ LIFO $___

          Crane Co. uses a periodic inventory system. Its records show the following for the month of May, in which 68 units were sold.

Units   	Unit Cost			Total Cost
May 1		Inventory			31   			$5				$155
15		Purchases		27      		$8				$216
24		Purchases		32			$9				$288
Totals			90							$659

Compute the ending inventory at May 31 and cost of goods sold using the FIFO and LIFO methods.

Ending inventory at May 31:
FIFO $_______
LIFO $_______

Cost of goods sold:
FIFO $_______
LIFO $_______

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Added by Richard C.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Kevra Barney

08/06/2022

Step 1

- Beginning inventory: 31 units - Purchases on May 15: 27 units - Purchases on May 24: 32 units Total units available = 31 + 27 + 32 = 90 units Step 2: Determine the units sold and units remaining. - Units sold during May: 68 units - Units remaining (Ending Show more…

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Crane Co. uses a periodic inventory system. Its records show the following for the month of May, in which 68 units were sold. Units Unit Cost Total Cost May 1 Inventory 31 $5 $155 15 Purchases 27 $8 $216 24 Purchases 32 $9 $288 Totals 90 $659 Compute the ending inventory at May 31 and cost of goods sold using the FIFO and LIFO methods. Ending inventory at May 31: FIFO $_______ LIFO $_______ Cost of goods sold: FIFO $_______ LIFO $_______

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Transcript

00:01 The information we have, so beginning inventory, and then we have purchase one and purchase two.

00:20 And then we're going to look at units, the price per unit, and total cost.

00:39 So the beginning inventory is 31 units at $5 per unit, which is a total cost of $155.

00:51 I'll put a dollar sign there just to remember.

00:54 Purchase number one is 27 units at $8 per unit, which is $2 .16 total.

01:05 And then purchase number two is $32, or sorry, 32 units at $9 per unit, which is $288 total.

01:16 So then the total units we have at the end of the month is 90, and total cost is $6.

01:25 659 and we're told that 68 units were sold during the month.

01:36 So we want to determine cost of goods sold and ending inventory for fifo and lifo.

01:42 So i will do, let's do fifo over here, first in, first out.

01:50 So if we're doing first in first out, we have 68 units.

01:53 We're going to take all of these units.

01:56 So 31 units at $5 each for $100 ,000.

02:01 $25.

02:03 And then we're going to take all of these units as well.

02:06 So $27 at $8, which is $216.

02:11 Then from there, if you add $31 and 27, you need 10 more to get 68.

02:17 So we're going to do 10 more units from this purchase at $9 to get $90...

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