Perpetual LIFO and Periodic FIFO

Shanty Co. sells item A as part of its product line. Information as to balances on hand, purchases, and sales of item A are given in the following table for the first six months of 2007.

Instructions
(a) Compute the ending inventory at June 30 under the perpetual LIFO inventory pricing method.
(b) Compute the cost of goods sold for the first six months under the periodic FIFO inventory pricing method.

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FIFO and LIFO periodic inventory methods

The Pine Shop shows the following data related to an item of inventory:

• January 01, Balance, 100 units @ $5.00
• January 09, Purchase, 300 units @ $5.40
• January 19, Purchase, 70 units @ $6.00
• January 31, Balance, 120 units

Instructions

1. What value should be assigned to the ending inventory using FIFO?
2. What value should be assigned to cost of goods sold using LIFO?

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Recording purchases of inventory at net amounts - periodic system

Alex Co. records purchases at net amounts and uses periodic syatem. Prepare entries for the following:

• June 11: Purchased merchandise on account, $5,000, terms 2/10, n/30.
• June 15: Returned part of June 11 purchase, $800, and received credit on account.
• June 30: Prepared the adjusting entry required for financial statements.

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