Inventories Problem

Create your own Excel workbook for this task. Please calculate each of the inventory methods on a separate

worksheet within the same workbook.

Our Poultry Farmer is stockpiling the bird feed, thinking it may give him a great return on his investment. He purchases the following inventory in 2021: Feb 1: Farmer has 78 20 pound bags of bird feed on hand, and had paid $15 per bag at Sweet Tweet. Remember, he paid cash and was given a bulk discount of 5% for paying cash at the register. Feb 6: Farmer bought 200 20 pound bags of bird feed @ $12.50 per bag from Sweet Tweet, paying cash. Feb 15: Farmer sold 36 bags of bird feed @ $30 per bag. Feb 16: Farmer sold 33 bags of bird feed @ $30 per bag Feb 19: Farmer bought 100 bags of bird feed @ $15.00 per bag from his distributor on his account.

Instructions

1. Using the information above, assume the farmer is using the periodic inventory method, which means he manually counts inventory at the end of each month. Determine the inventory cost for each of the following: a. The first-in, first-out method (FIFO) b. The last-in, first-out method (LIFO) c. And the weighted average cost method. 2. Using the information above, assume now that the farmer is using the perpetual inventory method, since he invested in a computerized accounting system that tracks his inventory for him as he receives and sells it. Determine the inventory cost for each of the following: a. The first-in, first-out method (FIFO) b. The last-in, first-out method (LIFO)