Explore BrainMass
Share

Cushing Inc: Cost-flow assumptions, FIFO and LIFO using periodic and perpetual systems

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

2.

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:

# of unit Unit Cost Total Cost
Inventory, January 1 . . . . . . . . . . . . . . . . 100 $13 $1,300
Purchases:
May 30 . . . . . . . . . . . . . . . . . . . . . . . . . . 160 15 2,400
September 28 . . . . . . . . . . . . . . . . . . . . 200 16 3,200

Goods available for sale . . . . . . . . . . . . . 460 $6,900

Sales:
February 22 . . . . . . . . . . . . . . . . . . . . . . (70)
June 11 . . . . . . . . . . . . . . . . . . . . . . . . . (150)
November 1 . . . . . . . . . . . . . . . . . . . . . . (190)

Inventory, December 31 . . . . . . . . . . . . . . 50

Required:
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 October 24, 2018, 6:36 pm ad1c9bdddf
https://brainmass.com/business/inventory/cushing-inc-cost-flow-assumptions-fifo-and-lifo-using-periodic-and-perpetual-systems-44227

Solution Summary

You will find the answer to these puzzling questions inside...

$2.19
See Also This Related BrainMass Solution

Cost-Flow Assumptions - FIFO and LIFO Using Periodic and Perpetual Systems

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
PURCHASES:
May 30 160 15 2,400

September 28 200 16 3,200

Goods available for sale 460 $6,900

Sales:
February 22 (70)
June 11 (150)
November 1 (190)
Inventory, December 31 50

Required:

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.

View Full Posting Details