EX 7-7

FIFO and LIFO Costs Under Perpetual Inventory System

OBJ. 2 - Describe three inventory cost flow assumptions and explain how theyimpact the income statement and balance sheet., 3 - Determine the cost ofinventory under the perpetual inventory system, using the FIFO, LIFO, and weightedaverage cost methods.The following units of an item were available for sale during the year:

Beginning inventory21,600 units at $20.00

Sale14,400 units at $40.00

First purchase48,000 units at $25.20

Sale36,000 units at $40.00

Second purchase45,000 units at $26.40

Sale33,000 units at $40.00

The firm uses the perpetual inventory system, and there are 31,200 units of theitem on hand at the end of the year. What is the total cost of the ending inventoryaccording to (a) FIFO, (b) LIFO?