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Simple Plan Enterprises uses a periodic inventory system. Its records showed the following: Inventory, December 31, using FIFO 44 Units @ $17 = $748 Inventory,
Simple Plan Enterprises uses a periodic inventory system. Its records showed the following: Inventory, December 31, using FIFO 44 Units @ $17 = $748 Inventory, December 31, using LIFO 44 Units @ $13 = $572
Transactions in the Following Year | Units | Unit Cost | Total Cost | ||||||
Purchase, January 9 | 56 | 18 | $ | 1,008 | |||||
Purchase, January 20 | 106 | 19 | 2,014 | ||||||
Sale, January 11 (at $41 per unit) | 86 | ||||||||
Sale, January 27 (at $42 per unit) | 62 | ||||||||
Required:
- Compute the number and cost of goods available for sale, the cost of ending inventory, and the cost of goods sold under FIFO and LIFO.
- Compute the inventory turnover ratio under the FIFO and LIFO inventory costing methods.
- Does the inventory method used make a significant difference in the inventory turnover ratio?
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