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Answer to Question #48791 in Accounting for Felisia Fitri Anita Aritonang

Question #48791
The units of an item available for sale during the year were as follows:
Jan. 1 Inventory 27 units at \$120
Feb. 17 Purchase 54 units at \$138
July 21 Purchase 63 units at \$156
Nov. 23 Purchase 36 units at \$165
There are 50 units of the item in the physical inventory at December 31. The periodic
inventory system is used. Determine the inventory cost by (a) the first-in, first-out
method, (b) the last-in, first-out method, and (c) the average cost method.
(a) According to the first-in, first-out method: Cost sold= 27*120 + 54*138 + 49*156 = \$18,336
Ending inventory = 14*156 + 36*165 = \$8,124
(b) According to the last-in, first-out method: Cost sold = 36*165 + 63*156 + 31*138 = \$20,046
Ending inventory = 23*138 + 37*120 = \$7,614
(c) According to the average cost method: Average cost = (27*120 + 54*138 + 63*156 + 36*165)/(27 + 54 + 63 + 36) = \$147
Cost sold = 130*147 = \$19,110
Ending inventory = 50*147 = \$7,350

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