Question:
Sharpers carry a special French wine that is popular with wine enthusiasts. Below is information relating to Sharper's purchases of this wine during September? During the same month, 124 bottles were sold. A sharper uses a periodic inventory system.
|
Date
|
Explanation
|
Bottle
|
Unit cost
|
Total Cost
|
|
Sept. 1
|
Inventory
|
26
|
$ 97
|
$ 2,522
|
|
Sept. 12
|
Purchases
|
45
|
102
|
4,590
|
|
Sept. 19
|
Purchases
|
20
|
104
|
2,080
|
|
Sept. 26
|
Purchases
|
50
|
105
|
5,250
|
|
|
Totals
|
141
|
|
$14,442
|
Instructions
(a) Compute the ending inventory at September 30 using the FIFO and the LIFO methods. Prove the amount allocated to cost of goods sold under each method.
(b) For both FIFO and LIFO, calculate the sum of ending inventory and cost of goods sold. What do you notice about the answers you found for each method?