Alternative Inventory Methods

Totman Company has the following transactions during the months of January and February:

Date	Transaction	Units	Cost/Unit
January 1	Balance	200
10	Purchase	50	$25
22	Sale	40
28	Purchase	60	27
February 4	Purchase	40	28
14	Sale	50
23	Sale	20

The cost of the inventory at January 1 is $24, $23, and $15 per unit, respectively, under the FIFO, average, and LIFO cost flow assumptions.

Required:

1. Compute the cost of goods sold for each month and the inventories at the end of each month for the following alternatives:
   1. FIFO periodic

      	Cost of Goods Sold	Ending Inventory
      January	$	$
      February	$	$

   2. FIFO perpetual

      	Cost of Goods Sold	Ending Inventory
      January	$	$
      February	$	$

   3. LIFO periodic

      	Cost of Goods Sold	Ending Inventory
      January	$	$
      February	$	$

   4. LIFO perpetual

      	Cost of Goods Sold	Ending Inventory
      January	$	$
      February	$	$

   5. Weighted average (Round unit costs to 4 decimal places and round final answers to nearest dollar.)

      	Cost of Goods Sold	Ending Inventory
      January	$	$
      February	$	$

   6. Moving average (Round unit costs to 4 decimal places. Round final answers to nearest dollar.)

      	Cost of Goods Sold	Ending Inventory
      January	$	$
      February	$	$

2. Reconcile the difference between the LIFO periodic and the LIFO perpetual results.

   January	Cost of Goods Sold	Ending Inventory
   Difference	$	$
   February	Cost of Goods Sold	Ending Inventory
   Difference	$	$

3. If the company had purchased an additional 25 units for $30 each on February 27, compute the cost of goods sold for February under FIFO periodic and LIFO periodic.

   February	FIFO periodic:	LIFO periodic:
   Cost of Goods Sold:	$	$

4. When computing inventory turnover ratios, it's preferable to use a measure because it avoids distortions caused by including costs in inventory. Use of the preferable method results in a inventory turnover.