Calculation 15 points 1 Roo Inc maintains a perpetual invent

Calculation (15 points):

1. Roo Inc. maintains a perpetual inventory system. Calculate the cost of merchandise sold for the month AND the value of the ending inventory using the LIFO and FIFO. (15 points, 8 points for filling blank, 7 points for calculation procedure.)

First in First out (FIFO): Late in First out (LIFO):

________Cost of merchandise sold _______Cost of merchandise sold

_________Value of ending inventory _______Value of ending Inventory

3-Mar	Inventory	12 t-shirts	$17
11-Mar	Purchase	13 t-shirts	$20
14-Mar	Sale	18 t-shirts
21-Mar	Purchase	9 t-shirts	$15
26-Mar	Sale	10 t-shirts

Under FIFO (First -In-First-Out) valuation , it is assumed that the sales are from the inventory which is purchased earliest. Therefore the ending inventory wil be valued at the latest purchase price.

Under LIFO (Last-In-First-Out) valuation , it is assumed that the sales are from the inventory which is purchased latest. Therefore the ending inventory wil be valued at the earliest purchase price.

FIFO LIFO

Cost of merchandise sold 509 497

Value of ending inventory 90 102

Workings:

FIFO

FIFO

Date	Beginning Inventory	Purchases	Cost of goods sold	Ending inventory
	Units	Cost per unit	Value	Units	Cost per unit	Value	Units	Cost per unit	Value	Units	Cost per unit	Value
3- Mar	12	17	204							12	17.00	204
11 - Mar	12	17	204	13	20	260				25	18.56	464
14 - Mar	25	18.56	464				18		324	7	20.00	140
21 - Mar	7	20	140	9	15	135				16	17.19	275
26 - Mar	16	17.1875	275				10		185	6	15.00	90
Total	12	17	204	22		395	28		509	6	15.00	90

Calculation (15 points): 1. Roo Inc. maintains a perpetual inventory system. Calculate the cost of merchandise sold for the month AND the value of the ending in

Calculation 15 points 1 Roo Inc maintains a perpetual invent

Solution

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