LoBianco Company FIFO, LIFO and Average Cost Determination

(FIFO, LIFO and Average Cost Determination)

LoBianco Company's record of transactions for the month of April was as follows.

Purchases Sales

April 1 (Balance on hand) 600 @ $6.00 April 3 500 @ $10.00
4 1,500 @ $6.08 9 1,300 @ $10.00
8 800 @ $6.40 11 600 @ $11.00
13 1,200 @ $6.50 23 1,200 @ $11.00
21 700 @ $6.60 27 900 @ $12.00
29 500 @ $6.79 4,500

5,300

(a) Assuming that periodic inventory records are kept in units only, compute the inventory at April 30 using (1) LIFO and (2) average cost.

LIFO $
Average Cost $

(b) Assuming that perpetual inventory records are kept in dollars, determine the inventory using (1) FIFO and (2) LIFO.

FIFO $
LIFO $

(c) Compute cost of goods sold assuming periodic inventory procedures and inventory priced at FIFO.

Cost of goods sold $

(d) In an inflationary period, which inventory method-FIFO, LIFO, average cost-will show the highest net income?

Solution Summary

For  (a) , (b) and (c) , please see the computations in excel (attached), showing exactly which purchase layers are in COGS or in ending inventory are shown in excel, attached, for your study and review. For (d), see attached instructional comment.