Perpetual LIFO, FIFO, moving average cost

cowgrlrolls · #1 Mar 13, 2007, 10:51 AM

I have an exam in my acct class, ugh... so lost!!!! I thought I had this all clear but I have done this problem multiple times and cant end up with our designated answer, can someone help? Any help on any part of the problem would help me out a lot, very lost

Smith is a retailer in CA. Smith uses perpetual inventory method. All sales returns from customers result in the goods being returned to regular inventory(assume that inventory is not damaged) Assume there are no Cr. transactions, all amts are settled in cash. Provided with following information...
Feb. 28 ending inventory at 150 units at $17 a unit
Mar 2 Purchase 100 units at $21 a unit
March 7 sale 150 units at $40 a unit
March 10 Purchase 75 units at $24 a unit
Mar 18 sale 50 units at $45 a unit
Mar 20 Purchase 100 units at $100 a unit
Mar 31 sale 160 units at $50 a unit

For each of following cost flow assumptions, calculat
A. cost of goods sold
B. ending inventory
C. Gross profit
1. LIFO
2. FIFO
3. moving average cost

which of these methods, under perpetual would better reflect replacement cost in the balance sheet?

Smith21000 · Mar 13, 2007, 01:13 PM

I only had time to give you an example of FIFO, I'll try to respond to the others if I have time. Please be advised this only works if your using the perpetual system, on exams be careful to identify this and don not get this confused with the periodic system.

See the attched file



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