Gerald D. Englehart sells high performance bicycles, Company has the following inventory

purchased.

Amount in Rs.

Purchase Date

June 01

June 20

July 04

Units Purchased

5

5

7

Total

17

Unit Cost

700

750

790

Total Cost

3500

3,750

5530

Total

12780

On June 23, Gerald D. Englehart sold 8 bicycles. The remaining 9 bicycles remained in inventory as on September 30, the end of Gerald D. Englehart fiscal year.

Required:

(i) Compute the cost of goods sold relating to the sale of June 23 and ending inventory of

bicycles at September 30. Using the Perpetual inventory system.

1. Average Cost Method

2. FIFO

3. LIFO

(ii) Use the above data, compute the cost of goods sold relating to the sale of June 23 and

ending inventory of bicycles at September 30. Using the Periodic inventory system.

1. Average Cost Method

2. FIFO

3. LIFO

(iii) Discuss the factors to be considered in selecting an inventory system. (Perpetual &

Periodic).