Cost flow assumptions-FIFO and LIFO using a periodic system. Beginning inventory was 600 units at a cost of $20 per unit. Goods available for sale during the year 2600 units at a total cost of $57,600. In May 1200 units were purchased at a total cost $26,400. The only other purchase transaction occurred during October. Ending inventory was 1100 units.

Question

Cost flow assumptions-FIFO and LIFO using a periodic system. Beginning inventory was 600 units at a cost of $20 per unit. Goods available for sale during the year 2600 units at a total cost of $57,600. In May 1200 units were purchased at a total cost $26,400. The only other purchase transaction occurred during October. Ending inventory was 1100 units.
a. Calculate the number of units purchased in October and the cost her unit purchased in October.
b. Calculate cost of goods sold and ending inventory under the following cost flow assumptions (using a periodic inventory system):
1. FIFO
2. LIFO

Carla · Answer

Assume that on September 1, 2013, a 6-month rent payment for $3,000 per month (for a total of $18,000) was made with respect to a commercial lease that the company entered into on that date as a tenant. The company took occupancy of the rented space immediately. The lease term will expire on February 28, 2014. The $18,000 payment was recorded as a debit to Prepaid Rent on September 1, 2013. The adjusting entry on December 31, 2013, is as follows: