Question

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. (For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase.) Date Activities Units Acquired at Cost.

Date	Activities	Units acquired at cost	Units sold at retail
March 1	Beginning inventory	100 units @ \(50.00 per unit
March 5	Purchase	400 units @ \)55.00 per unit
March 9	Sales		420 units @ \(85.00 per unit
March 18	Purchase	120 units @ \)60.00 per unit
March 25	Purchase	200 units @ \(62.00 per unit
March 29	Sales		160 units @ \)95.00 per unit
	Total	820 units	580 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	$14,800
LIFO	$13,680
Weighted Average	$14,352
Specific Identification	$14,060

Step-by-step solution

Definition of Specific Identification

The inventory valuation method under which the business entity keeps track of each inventory item for assigning the inventory cost is known as specific identification. Under this method, inventory is not grouped; instead, they are kept individually.

FIFO

Date	Beginning inventory/purchases			Cost of goods sold			Ending inventory
	Units	Per unit cost	Total cost	Units	Per unit cost	Total cost	Units	Per unit cost	Total cost
March 1	100	$50	$5000				100	$50	$5000
March 5	400	$55	$22,000				100	$50	$5,000
							400	$55	$22,000
March 9				100	$50	$5,000
				320	$55	$17,600	80	$55	$4,400
March 18	120	$60	$7,200				80	$55	$4,400
							120	$60	$7,200
March 25	200	$62	$12,400				80	$55	$4,400
							120	$60	$7,200
							200	$62	$12,400
March 29				80	$55	$4,400
				80	$60	$4,800	40	$60	$2,400
							200	$62	$12,400
									$14,800

LIFO

Date	Beginning inventory/purchases			Cost of goods sold			Ending inventory
	Units	Per unit cost	Total cost	Units	Per unit cost	Total cost	Units	Per unit cost	Total cost
March 1	100	$50	$5,000				100	$50	$5,000
March 5	400	$55	$22,000				100	$50	$5,000
							400	$55	$22,000
March 9				400	$55	$22,000
				20	$50	$1,000	80	$50	$4,000
March 18	120	$60	$7,200				80	$50	$4,000
							120	$60	$7,200
March 25	200	$62	$12,400				80	$50	$4,000
							120	$60	$7,200
							200	$62	$12,400
March 29				160	$62	$9,920	80	$50	$4,000
							120	$60	$7,200
							40	$62	$2,480
							240		$13,680

Weighted Average

Date	Beginning inventory/purchases			Cost of goods sold			Ending inventory
	Units	Per unit cost	Total cost	Units	Per unit cost	Total cost	Units	Per unit cost	Total cost
March 1	100	$50	$5,000				100	$50	$5,000
March 5	400	$55	$22,000				500	$54	$27,000
March 9				420	$54	$22,680	80	54	$4,320
March 18	120	$60	$7,200				200	$57.6	$11,520
March 25	200	$62	$12,400				400	$59.80	$23,920
March 29				160	$59.80	$9,568	240	59.8	$14,352

Specific Identification

Particular	Units	x	Per unit Cost	=	Total cost
Beginning inventory	20	x	$50	=	$1,000
March 5	60	x	$55	=	3,300
March 18	80	x	$60	=	4,800
March 25	80	x	$62	=	4,960
Total				=	$14,060