In its first month of operations, Kingbird, Inc. made three purchases of merchandise in the following sequence: (1) 240 units at $7, (2) 340 units at $9, and (3) 440 units at $10. Assuming there are 140 units on hand at the end of the period, compute the cost of the ending inventory under (a) the FIFO method and (b) the LIFO method. Kingbird, Inc. uses a periodic inventory system.

Question

Garrison

Business

5 January, 14:03

In its first month of operations, Kingbird, Inc. made three purchases of merchandise in the following sequence: (1) 240 units at $7, (2) 340 units at $9, and (3) 440 units at $10. Assuming there are 140 units on hand at the end of the period, compute the cost of the ending inventory under (a) the FIFO method and (b) the LIFO method. Kingbird, Inc. uses a periodic inventory system.

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Mohammad Rangel · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Purchases:

(1) 240 units at $7.

(2) 340 units at $9.

(3) 440 units at $10.

Assuming there are 140 units on hand at the end of the period.

A) FIFO (first-in, first-out)

Inventory = 140*10 = $1,400

B) LIFO (last-in, first-out)

Inventory = 140*7 = $980