Cost-flow assumptions-FIFO and LIFO using periodic and perpetual systems.
The inventory records of Cushing, Inc., reflected the following information for the year ended
December 31, 2004:
Number of Units Cost Total Cost
Inventory, January 1 100 $13 $1,300
May 30 160 15 2,400
September 28 200 16 3,200
Goods available for sale 460 $6,900
February 22 (70)
June 11 (150)
November 1 (190)
Inventory, December 31 50
a. Assume that Cushing, Inc., uses a periodic inventory system. Calculate cost of goods sold and ending inventory under FIFO and LIFO.
b. Assume that Cushing, Inc., uses a perpetual inventory system. Calculate cost of goods sold and ending inventory under FIFO and LIFO.
c. Explain why the FIFO results for cost of goods sold and ending inventory are the same in your answers to parts a and b, but the LIFO results are different.
d. Explain why the results from the LIFO periodic calculations in part a cannot possibly represent the actual physical flow of inventory items.© BrainMass Inc. brainmass.com March 4, 2021, 8:19 pm ad1c9bdddf
FIFO and LIFO are studied.