Altira Corporation uses a periodic inventory system The foll

Altira Corporation uses a periodic inventory system. The following information related to its merchandise inventory during the month of August 2018 is available: Aug.1 Inventory on hand—5,000 units; cost $7.90 each. 8 Purchased 22,000 units for $6.70 each. 14 Sold 16,000 units for $13.20 each. 18 Purchased 12,000 units for $6.20 each. 25 Sold 15,000 units for $12.20 each. 31 Inventory on hand—8,000 units. Required: Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using each of the following cost flow methods:

Solution

FIFO Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory - Periodic FIFO # of units Cost per unit Total # of units Cost per unit Total # of units Cost per unit Total Beginning Inventory 5000 7.9 39500 5000 7.9 39500 Purchases: 8-Aug 22000 6.7 147400 22000 6.7 147400 18-Aug 12000 6.2 74400 4000 6.2 24800 8000 6.2 49600 Total 39000 261300 31000 211700 8000 49600 LIFO Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory - Periodic LIFO # of units Cost per unit Total # of units Cost per unit Total # of units Cost per unit Total Beginning Inventory 5000 7.9 39500 5000 7.9 39500 Purchases: 8-Aug 22000 6.7 147400 19000 6.7 127300 3000 6.7 20100 18-Aug 12000 6.2 74400 12000 6.2 74400 Total 39000 261300 31000 201700 8000 59600 Weighted Average Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory - Periodic Weighted Average # of units Cost per unit Total # of units Cost per unit Total # of units Cost per unit Total Beginning Inventory 5000 7.9 39500 Purchases: 8-Aug 22000 6.7 147400 18-Aug 12000 6.2 74400 Total 39000 261300 31000 6.7 207700 8000 6.7 53600