1 answer

Problem 2 (25 points) Cheryl Corporation uses a periodic inventor method to determine the cost flow...

Question:

problem 2 (25 points) Cheryl Corporation uses a periodic inventor method to determine the cost flow of good calculate Cheryl
problem 2 (25 points) Cheryl Corporation uses a periodic inventor method to determine the cost flow of good calculate Cheryl's ending inventory value and cost odic inventory system and has adopted the LIFO cost flow of goods. Using following information. value and cost of goods sold: Opening inventory at 1/1/20XX ou units @ $12.00 per unit Inventory purchased on 4/1/20XX 100 units @ $13.00 per unit Inventory purchased on 7/1/20XX 100 units @ $14.00 per unit Inventory purchased on 9/30/20XX 100 units @ $15.00 per unit At 12/31/20xx Cheryl's personnel take a physical inventory and there are 400 units on hand.

Answers

Ans. Available for sale
Date Units Rate Total
1-Jan 500 $12.00 $6,000
1-Apr 100 $13.00 $1,300
1-Jul 100 $14.00 $1,400
30-Sep 100 $15.00 $1,500
Cost of goods available for sale 800 $10,200
Ending inventory units = 400 units
Units sold   =    Units available for sale - Units in ending inventory
800 - 400 400 units
Periodic LIFO:
Date Units Rate Total
30-Sep 100 $15.00 $1,500
1-Jul 100 $14.00 $1,400
1-Apr 100 $13.00 $1,300
1-Jan 100 $12.00 $1,200
Cost of goods sold 400 $5,400
*In LIFO method the units that have purchased last, are released the first one and ending inventory units
remain from the first purchase.
Ending inventory = Total cost of goods available for sale -   Cost of goods sold
$10,200 - $5,400
$4,800
.

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