FIFO, LIFO AND AVERAGE COST IN A PERIODIC INVENTORY SYSTEM
The owner of Valle Inc. has asked for your help in determining the comparative effects of the FIFO, LIFO
and Average Cost flow methods of accounting for the business' periodic inventory system.
For 2014, the accounting records show these inventory related transactions:
Inventory detail:
		Date of Inventory Transaction	Type of Inventory Transaction	Quantity of Inventory Units	Cost per Unit of Inventory
		January 1, 2014	Beginning bal.	10,000	$4.50
		May 10, 2014	Purchase	35,000	$5.00
		August 15, 2014	Purchase	60,000	$5.20
		November 20, 2014	Purchase	25,000	$5.50
The following information is available with respect to the year's activities:
	Sales price per unit =			$8.25
	Number of units in ending inventory =			30,000
	Total selling expenses for the year =			$85,000
	Total administrative expenses for the year =			$55,000
	Income tax rate to be paid by the company =			21%
	Sales returns and allowances for the year =			$21,500
	Sales discounts given for the year =			$15,080
Challenge:
1.	Complete the Cost of Goods Available for Sale Chart provided directly below:
	Cost of Goods Available for Sale:
	Date	Transaction	Units	Unit Cost	Total Cost
	Total	XXXXXXXXXX		XXXXXX
2.	In the space provided on the following page, calculate the number of units included in and total
	cost for both ending inventory and cost of goods sold for each of the three inventory
	costing methods. Enter your final answers in the chart provided below:
			Ending Inventory		Merchandise Sold
			Units Left	Total Cost	Units Sold	Total Cost
		a. Using FIFO
		b. Using LIFO
		c. Using Avg. Cost
	a.	Calculations for FIFO:
		Ending Inventory			Cost of Goods Sold
	b.	Calculations for LIFO:
		Ending Inventory			Cost of Goods Sold
	c.	Calculations for Average Cost:
		Ending Inventory			Cost of Goods Sold

FIFO, LIFO AND AVERAGE COST IN A PERIOOIC INVENTORY SYSTEM Far 2014, he May 1D 201 Bales price per and