Discussion:
Andreas Boards sells a snowboard Xpert, that is popular with snowboard enthusiasts. Below is information relating to Andreas purchases of Xpert snowboards during September. During the same month, 121 Xpert snowboards were sold. Andreas uses a periodic inventory system.
Date Explanation Units Unit Cost Total Cost
Sept 1 Inventory 26 $ 97 $2,522
Sept 12 Purchases 45 105 4,725
Sept 19 Purchases 20 108 2,160
Sept 26 Purchases 50 109 5,450
Totals 141 $14,857
Compute the ending inventory at September 30 and cost of goods sold using the FIFO and LIFO methods.
FIFO LIFO
Ending Inventory $ $
Cost of goods sold $ $
For both FIFO and LIFO, compute the sum of cost of goods sold and ending inventory. What do you notice about the result for each method.
(Which one is correct)
the sums for FIFO and LIFO are equal
the sum is greater for LIFO
the sum is greater for FIFO