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Double extension method / LIFO and FIFO

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A. Wolf Company adopted the dollar-value LIFO method on January 1, 2007, at which time its inventory consisted of 6,000 units of Item A @ $5.00 each and 3,000 units of Item B @ $16.00 each. The inventory at December 31, 2007 consisted of 12,000 units of Item A and 7,000 units of Item B. The most recent actual purchases related to these items were as follows:
Quantity
Items Purchase Date Purchased Cost Per Unit
A 12/7/07 2,000 $ 6.00
A 12/11/07 10,000 6.00
B 12/15/07 7,000 17.00

Using the double-extension method, what is the price % index for 2007 that should be computed by Wolf Company?

B. Patterson Co. has the following data related to an item of inventory:
Inventory, March 1 100 units @ $4.20
Purchase, March 7 350 units @ $4.40
Purchase, March 16 70 units @ $4.50
Inventory, March 31 130 units

What is the value assigned to cost of goods sold if Patterson uses FIFO?

What is the value assigned to ending inventory if Patterson uses LIFO ?

Solution Preview

A. Wolf Company adopted the dollar-value LIFO method on January 1, 2007, at which time its inventory consisted of 6,000 units of Item A @ $5.00 each and 3,000 units of Item B @ $16.00 each. The inventory at December 31, 2007 consisted of 12,000 units of Item A and 7,000 units of Item B. The most recent actual purchases related to these items were as follows:
Quantity
Items Purchase Date Purchased Cost Per ...

Solution Summary

The solution explains how to calculate the ending inventory using double extension method and using LIFO and FIFO

$2.19