Periodic Inventory by Three Methods

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	5 units @ $33
Feb. 17	Purchase	18 units @ $34
July 21	Purchase	10 units @ $37
Nov. 23	Purchase	15 units @ $38

There are 5 units of the item in the physical inventory at December 31. The periodic inventory system is used.

a. Determine the inventory cost by the first-in, first-out method.

b. Determine the inventory cost by the last-in, first-out method.

c. Determine the inventory cost by the weighted average cost method. Round average unit cost to the nearest cent and final answers to the nearest whole dollar, if required. 2. Periodic Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	50 units @ $94
Mar. 10	Purchase	60 units @ $104
Aug. 30	Purchase	20 units @ $108
Dec. 12	Purchase	70 units @ $112

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Inventory Method	Merchandise Inventory	Merchandise Sold
a. First-in, first-out (FIFO)	$fill in the blank 1	$fill in the blank 2
b. Last-in, first-out (LIFO)	fill in the blank 3	fill in the blank 4
c. Weighted average cost	fill in the blank 5	fill in the blank 6

3.Comparing Inventory Methods

Assume that a firm separately determined inventory under FIFO and LIFOand then compared the results.

a. In each dropdown that follows, select the correct sign [less than (<), greater than (>), or equal (=)] for each comparison, assuming periods of rising prices.

1. FIFO inventory	<>=	LIFO inventory
2. FIFO cost of merchandise sold	<>=	LIFO cost of merchandise sold
3. FIFO net income	<>=	LIFO net income
4. FIFO income taxes	<>=	LIFO income taxes

b. Why would management prefer to use LIFO over FIFO in periods of rising prices?

1.