Perpetual Inventory System and Inventory Costing Methods

The inventory of Wood4Fun and data on purchases and sales for a two-month period follow. The company closes its books at the end of each month. It uses the perpetual inventory system.

Apr. 1		Beginning inventory	50 units @ $204
10		Purchase	100 units @ $220
17		Sale	90 units
30		Ending inventory	60 units
May 2		Purchase	100 units @ $216
14		Purchase	50 units @ $224
22		Purchase	60 units @ $234
30		Sale	200 units
31		Ending inventory	70 units

In preparing the solutions, it is helpful to determine the balance of inventory after each transaction, as shown in the Business Insight: Concepts and Applications feature in this chapter.

Determine the cost of ending inventory and cost of goods sold for April and May using the average-cost method. Round unit costs to two decimal places and round the final answers to the nearest dollar. Enter all amounts as positive numbers.

1. Determine Cost of Ending Inventory for April and May using the LIFO Method