Question
LIFO QUESTION : I understand how the calculation was done but don't understand WHY I got 03/05 COGS -> 2320(.65)= $ 1508 03/30 COGS ->
LIFO QUESTION: I understand how the calculation was done but don't understand WHY
I got
03/05 COGS -> 2320(.65)= $ 1508
03/30 COGS -> 2580(0.80)+2580(0.72)= $ 3921.6
TOTAL COGS= $ 5429.6
ENDING INVENTORY= 7593.15-5429.6= $ 2163.55
WHY IS THIS WRONG? Realistically, if you go by the dates wouldn't you be selling 2320 liters for $0.65 on March 5th. Then on March 30th you would sell 2580 liters for $0.80 and 2580 liters for 0.72?
I understand what they did to get the 2,076.75 but it it doesn't make any sense to me logically considering the dates, please explain!
Problem 6-6A (Part Level Submission) You are provided with the following information for Sunland Inc. Sunland Inc. uses the periodic system of accounting for its inventory transactions. March 1 Beginning inventory 1,950 liters at a cost of 60 per liter. March 3 Purchased 2,475 liters at a cost of 65 per liter. March 5 Sold 2,320 liters for $1.10 per liter. March 10 Purchased 3,820 liters at a cost of 72 per liter. March 20 Purchased 2,580 liters at a cost of 80 per liter. March 30 Sold 5,160 liters for $1.25 per liter. Problem 6-6A (Part Level Submission) Calculate the value of ending inventory that would be reported on the balance sheet, under each of the following cost flow assumptions. (Round answers to 2 decimal places, e.g. 125.25.) (1) Specific identification method assuming: (i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,320 liters from the March 3 purchase; and (ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 500 liters from March 1; 545 liters from March 3; 2,900 liters from March 10; 1,215 liters from March 20. (2) FIFO (3) LIFO Ending Inventory Specific identification $ 2,420.90 FIFO $ 2,614.80 LIFO $ 2,076.75
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