[Jledson]

I'm confused when doing my homework. Suppose the robotics inc inventory records for a particular item indicated the following transaction in September. Sept 1. Beginning inventory 10 units@$29. Sept. 9 purchase 18 units @ $32. Sept 23. Purchase 9 units @$30. Sept 28 purchase 6 units @$31. The company sold 24 units of sept 30 compute the ending inventory and cost of goods sold using each of the following methods. (1) LIFO (2) FIFO (3) average cost

[pready]

First you need to calculate the inventory available for sale. For this just get your total purchase cost for each purcchase, then add the units together to get total units for sale and add the total costs together to get your inventory available for sale cost.

Now you need to calculate the inventory sold for each situation. For average cost you need to get the average cost of your inventory available for sale, which is calculated by your total cost (calulated above) divided by total units available for sale (calculated above). Now simply take your units sold times the average cost to get Cost Of Goods Sold. Now take this amount and subtract this from inventory available for sale to get your ending inventory. For ending units just subtract your Cost Of Goods Sold units from your inventory available for sale units.

For LIFO you have to use the information in your problem. You sold 24 units on Sep 30. You have to use your last purchase and work backword toward your beginning inventory until you account for 24 units. So you have 6 units on Sep 28, 9 units on Sep 23, and 9 units on Sept 23 to get your total of 24 units sold to account for. Now get your unit prices times number of units to get your Cost of Goods Sold for LIFO. Now subtract this amount from your inventory available for sale to get your ending inventory. Also subtract your units sold from your units available for sale to get your ending units.

For FIFO you need to account for 24 units sold from your beginning inventory forward toward your last purchase. So 10 units of beginning inventory and 14 units from your Sep 9 purchase equals 24 units sold. So you need to calculate the total cost for your units, then add them together to get your Cost Of Goods Sold for FITO. For ending inventory just subtract your Cost Of Goods Sold for your inventory available for sale and subtract out your number of units sold from your units avialable for sale.