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    FIFO, LIFO calculations under periodic and perpetual method

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    Cost-flow assumptions?FIFO and LIFO using periodic and perpetual systems.
    The inventory records of Twilight, Inc., reflected the following information for the year
    ended December 31, 2005:
    Number of Unit Total
    Units Cost Cost
    Inventory, January 1 150 25 3750
    Purchases:
    30-May 250 26 6500
    28-Sep 350 28 9800
    Goods available for sale 750 20050
    Sales:
    February-05 100
    June-05 250
    November-05 300
    Total sales 650
    Inventory, December 31 100

    how do you solve for FIFO AND LIFO under periodic and perpetual system

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    Solution Preview

    Total goods available for sale are 750 units and the units sold are 650. The ending inventory will be 100 units.

    Let us take FIFO first. In FIFO, the assumption is that goods purchased first are sold first. The cost of goods sold and ending inventory under FIFO is the same under both perpetual and periodic system.
    The ending inventory of 100 units will be the latest purchases which is 28 Sep. The ending inventory is 100X28= ...

    Solution Summary

    The solution explains how to calculate the cost of goods sold, ending inventory under FIFO and LIFO using perpetual and periodic methods

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