The Geewhiz Company uses the perpetual inventory system. The Geewhiz Company has the following data available for the month of January:

Date
Transaction
Units
Unit Cost
Jan. 1
Beginning inventory
200
$2.00
Jan. 9
Purchase
300
$2.20
Jan. 10
Sale
400

Jan. 15
Purchase
400
$2.30
Jan. 18
Sale
300

Jan. 24
Purchase
100
$2.40
Jan. 30
Sale
10

Determine the cost of the ending inventory using the following methods:
a. FIFO
b. LIFO
c. Moving-average (Round per unit costs to four decimal places and all other dollar amounts to two decimal places.)

What will be an ideal response?

Answer:
a. FIFO
FIFO periodic is the same as FIFO perpetual. There are 1,000 units to sell. The company sold 710 units. Ending inventory has 290 units. Under FIFO, ending inventory has the latest costs:
(100 × $2.40) + (190 × $2.30) = $677

b. LIFO

Cost of Goods Sold
Ending Inventory
1/9

(200 × $2.00) + (300 × $2.20) = $1,060
1/10
300 × $2.20 = $660
100 × $2.00 = $200
100 × $2.00 = $200
1/15

100 × $2.00 = $200
Add: 400 × $2.30 = $920
1/18
300 × $2.30 = $690
(100 × $2.00) + (100 × $2.30) = $430
1/24

(100 × $2.00) + (100 × $2.30) = $430
Add: 100 × $2.40 = $240
1/30
10 × $2.40 = $24
(100 × $2.00) + (100 × $2.30) + (90 × $2.40) = $646

Ending inventory at cost using LIFO is $646.

c. Moving average

Cost of Goods Sold
Ending Inventory
1/9
 = $2.12
1/10
400 × $2.12
100 × $2.12 = $212
1/15

100 × $2.12 = $212
Add: 400 × $2.30 = $920
Total: $1,132 / 500 = $2.264
1/18
300 × $2.264
200 × $2.264 = $452.80
1/24

200 × $2.264 = $452.80
Add: 100 × $2.40 = $240
Total: $452.8 + $240 = $692.80 / 300 = $2.3093
1/30
10 × $2.3093
290 × $2.3093 = $669.70

Ending inventory at cost using moving average is $669.70.