Question
NLT Trading shows the beginning inventory of a particular product, and the purchases during the current year, as follows: Jan. 1 Beginning Inventory 45 units
NLT Trading shows the beginning inventory of a particular product, and the purchases during the current year, as follows:
| Jan. | 1 | Beginning Inventory | 45 | units @ | $7.70 | = | $346,50 |
| Apr. | 8 | Purchase | 50 | units @ | $8.10 | = | $405.00 |
| Aug. | 11 | Purchase | 30 | units @ | $8.90 | = | $267.00 |
| Dec. | 23 | Purchase | 30 | units @ | $9.60 | = | $288.00 |
|
| Total available for Sale | 155 | units |
|
| $1,306.50 | |
During the year NLT Trading sold in total 95 units of this product.
Instruction: (show your calculations and round to 2 decimal places)
Determine the cost of the year-End Inventory and the Cost of Goods Sold for this product under each of the following Methods of Inventory Valuation:
|
| Inventory at Dec. 31st | Cost of Goods Sold |
| Average Cost |
|
|
| First-in, First-out |
|
|
| Last-in, First-out |
|
|
If NLT Trading wants to achieve a high profit end of the year, which method should they choose? Explain fully your answer.
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