Asked by Corien Frazier on Apr 27, 2024
Verified
On July 1, the Lavaca Company began business with the purchase of 250 units of inventory for $21, 625.During the month, Lavaca had the following inventory transactions:
Date July 6 Purchased 100 units @ $75 per unit. 11 Sold 200 units. 17 Sold 85 urits. 24 Purchased 100 units @$125 per unit 28 Purchased 50 units @$110 per unit. 30 Sold 100 unite \begin{array}{ll}\text { Date }\\\text { July } 6 & \text { Purchased } 100 \text { units @ } \$ 75 \text { per unit. } \\11 & \text { Sold } 200 \text { units. } \\17 & \text { Sold 85 urits. } \\24 & \text { Purchased } 100 \text { units } @ \$ 125 \text { per unit } \\28 & \text { Purchased } 50 \text { units } @ \$ 110 \text { per unit. } \\30 & \text { Sold } 100 \text { unite }\end{array} Date July 61117242830 Purchased 100 units @ $75 per unit. Sold 200 units. Sold 85 urits. Purchased 100 units @$125 per unit Purchased 50 units @$110 per unit. Sold 100 unite Required:
Compute the cost of the inventory at the end of July under the following alternatives:
a. \quad FlFO periodic
b. \quad FIFO perpetual
c. \quad LIFO periodic
d. \quad LIFO perpetual
e. \quad Weighted average (round unit costs to 2 decimal placess
f. \quad Moving average (round unit costs to 2 decimal places)
FIFO Perpetual
An inventory valuation method where the first items purchased (First In) are the first ones to be used or sold (First Out) on a continuous basis.
LIFO Perpetual
A method of inventory valuation which assumes that the last items placed in inventory are the first ones sold, applied continuously throughout the accounting period.
Weighted Average
This is a calculation method that takes into account the varying degrees of importance of the numbers in a data set, giving different weights to some of the data points.
- Understand the application of several inventory valuation methods (FIFO, LIFO, weighted average, specific identification) and evaluate their repercussions for financial statements.
Verified Answer
Learning Objectives
- Understand the application of several inventory valuation methods (FIFO, LIFO, weighted average, specific identification) and evaluate their repercussions for financial statements.
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