[richardspamela]

Dec. 1- purchase of 1,000 markers for 1.00 resale. Markers were purchased for cash
dec. 4- 500 markers were sold for $4.00 each on account
dec. 7 400 markers were sold for $4.50 each for cash
Dec. 10- purchase of 1,000 markers for $1.50 each for resale. Markers were purchased for cash
Dec. 15- 800 Markers were sold for $5.00 on account
Dec. 20- purchase of 1000 markers for $2.00 each for resale. Markers were purchased for cash.
Dec. 24- 900 markers were sold for $5.50 on account

[Just Looking]

First you need to understand the definitions of FIFO and LIFO. Please be sure that your question is complete and that there is no beginning inventory. In your example, we have the following:

1000 markers purchased $1.00
500 markers sold
500 remaining

400 sold
100 remaining

1000 purchased for $1.50
1100 available
800 sold
300 remaining

1000 markers purchased for $2
1300 available
900 sold
400 remaining



FIFO is first in first out, so the first items in are deemed to be sold first. The first 500 markers sold would be costed at $1.00 each. The remaining 500 are valued at $1.00 each. The next 400 sold would be at a cost of $1.00 each, and the 100 remaining are at $1.00 each. Next 800 are sold. FIFO says first in first out, so 100 of these are from the first batch of purchases and are costed at $1.00 per. The next 700 will be at the next price level of $1.50 each, and the remaining 300 items at that point are valued at $1.50 each. The next 900 sold will then be costed as 300 at $1.50 per and the other 600 at $2.00 each. The 400 remaining will be at $2.00 each.

LIFO is last in first out. In your example, the first 500 markers sold would be costed at $1.00 each. The remaining 500 are valued at $1.00 each. The next 400 sold would be at a cost of $1.00 each, and the 100 remaining are at $1.00 each. Next 800 are sold. LIFO says last in first out, so these are costed at $1.50 each (the most recent cost of purchases). The 300 remaining are valued at 200 @ $1.50 each and 100 at $1.00 each. The next 900 sold will then be costed at $2.00 (again, most recent cost). The 400 remaining will be valued as 200 @ $1.50 each, 100 at $1.00 each, and 100 at $2.00 each.