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Inventory - FIFO, LIFO, Average for Eddings Company

Compute FIFO, LIFO and Average. Please give detailed explanations on how/why each answer was found.

Eddings Company had a beginning inventory of 400 units of Product XNA at a cost of $8.00 per unit. During the year, purchases were:
Feb. 20 600 units @ $9 Aug. 12 300 units @ $11
May 5 500 units @ $10 Dec. 8 200 units @ $12

Eddings Company uses a periodic inventory system. Sales totaled 1,500 units.

Determine (1) the ending inventory, and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average). (Round the unit cost in the average cost method to 2 decimal places. Use the rounded amounts for subsequent calculations. Round final answers to 0 decimal places.)
FIFO LIFO Average Cost
Ending Inventory
Cost of Goods Sold

Solution Preview

View the attached table for clarity

Number of units Price per unit Total price
Beginning inventory 400 8 3200
Feb 20 600 9 5400
May 5 500 10 5000
Aug 12 300 11 3300
Dec 8 200 12 2400

Total units = 2000
Sold = 1500
Inventory remaining = 500 units
Total price of inventory = 19,300

FIFO ending inventory = (200 x 12) + (300 x 11) = 5700
FIFO cost of goods sold = 19300 - ...

Solution Summary

The solution includes detailed calculations and explanations for the three inventory methods for Eddings Company.

$2.19