Question: Periodic Inventory by Three Methods

The units of an item available for sale during the year were as follows:




Jan.1

Inventory

10 units @ $47



Feb. 17

Purchase

15 units @ $49



Jul. 21

Purchase

17 units @ $51



Nov. 23

Purchase

16 units @ $52



There are 29 units of the item in the physical inventory of December 31. The periodic inventory system is used. Determine the inventory cost under each of the following methods. Round interim calculations and the final answer to the nearest whole dollar.

a. Determine the inventory cost by the first-in, first-out method.
$

b. Determine the inventory cost by the last-in, first-out method.
$

c. Determine the inventory cost by the average cost method.
$  Edit

Answer: A.
FIFO ending inventory cost = 16*52 = $832 (Ans.)
Remember that the first units in (the oldest ones) are sold first; therefore, we leave the newest units for ending inventory.
  Edit