Question

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 250 from the September 5 purchase.)

Date	Activities	Units acquired at cost	Units sold at retail
Jan 1	Beginning inventory	600 units @ \(45.00 per unit
Feb 10	Purchases	400 units @ \)42.00 per unit
March 13	Purchases	200 units @ \(27.00 per unit
March 15	Sales		800 units @ \)75.00 per unit
Aug 21	Purchases	100 units @ \(50.00 per unit
Sep 5	Purchases	500 units @ \)46.00 per unit
Sep 10	Sales		600 units @ $75.00 per unit
	Total	1,800 units	1,400 units

Required

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round all amounts to cents.)

Short answer

Method	Ending Inventory
FIFO	$18,400
LIFO	$18,000
Weighted Average	$17,760
Specific Identification	$18,200

Step-by-step solution

Definition of Current Assets

Assets held in the business and will provide benefits over the short-term period are known as current assets. It includes inventory, receivables, and cash.

Cost Assigned to Ending Inventory

(a) FIFO

Particular	Beginning Inventory/ Purchases	Cost of goods sold	Ending Inventory
Units	Per unit	Total cost	Units	Per unit	Total cost	Units	Per unit	Total cost
1 Jan	600	45	27,000				600	45	27,000
10 Feb	400	42	16,800				600	45	27,000
							400	42	16,800
13 Mar	200	27	5,400				600	45	27,000
							400	42	16,800
							200	27	5,400
15 Mar				600	45	27,000
				200	42	8,400	200	42	8,400
							200	27	5,400
21 Aug	100	50	5,000				200	42	8,400
							200	27	5,400
							100	50	5,000
5 Sep	500	46	23,000				200	42	8,400
							200	27	5,400
							100	50	5,000
							500	46	23,000
10 Sep				200	42	8,400
				200	27	5,400
				100	50	5,000
				100	46	4,600	400	46	18,400

(b) LIFO

Particular	Beginning Inventory/ Purchases	Cost of goods sold	Ending Inventory
Units	Per unit	Total cost	Units	Per unit	Total cost	Units	Per unit	Total cost
1 Jan	600	45	27,000				600	45	27,000
10 Feb	400	42	16,800				600	45	27,000
							400	42	16,800
13 Mar	200	27	5,400				600	45	27,000
							400	42	16,800
							200	27	5,400
15 March				200	27	5,400
				400	42	16,800
				200	45	9,000	400	45	18,000
21 Aug	100	50	5,000				400	45	18,000
							100	50	5,000
5 Sep	500	46	23,000				400	45	18,000
							100	50	5,000
							500	46	23,000
10 Sep				500	46	23,000
				100	50	5,000	400	45	18,000

(c) Weighted Average

Particular	Beginning Inventory/ Purchases	Cost of goods sold	Ending Inventory
Units	Per unit	Total cost	Units	Per unit	Total cost	Units	Per unit	Total cost
1 Jan	600	45	27,000				600	45	27,000
10 Feb	400	42	16,800				1,000	43.8	43,800
13 March	200	27	5,400				1,200	41	49,200
15 March				800	41	32,800	400	41	16,400
21 Aug	100	50	5,000				500	42.8	21,400
5 Sep	500	46	23,000				1,000	44.4	44,400
10 Sep				600	44.4	26,640	400	44.4	17,760

(d) Specific Identification

Particular	Units	X	Per unit cost	=	Total cost
10 February	100	X	42	=	4,200
21 August	50	X	50	=	2,500
5 September	250	X	46	=	11,500
Total	$18,200