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Cost Valuation Systems: Inventory and Costs of Goods Sold

Please help to analyze the questions. In addition I need the formula to for the FIFO method and LIFO along with the cost of good sold.

See the attached file.

1. The Beautifully Fabulous Beauty Salon (BFBS) purchases its inventory from a manufacturer in California. BFBS has a high selling product called "Beauty Gloss". During the year BFBS disclosed the following information concerning the inventory:

January 1, 2009
Beginning Inventory
245 units
$27.00 per unit

March 31, 2009
Purchase of Inventory
360 units
$29.00 per unit

June 30, 2009
Purchase of Inventory
1000 units
$32.00 per unit

September 30, 2009
Sales of Inventory
1447 units

2. Analyze the above data using the LIFO an FIFO methods. What are the Inventory and Cost of Good Sold (COGS) ?

a. In addition to the above data, suppose the number of units available at the beginning of January was 545 and the cost of the March purchase was $31.00 per unit; what would COGS be for September? What would the ending Inventory be for September?

4. Discuss the measurements used to recognize the amounts recorded in the Inventory and Cost of Goods Sold and the impact of Net Income.

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Solution Summary

The solution discusses the cost valuation system, including the inventory and costs of goods sold.