Information about Elsa's Boards is presented in below.
Additional data regarding Elsa's sales of Xpert snowboards are provided below. Assume that Elsa's uses a perpetual inventory system.
Instructions
- Compute ending inventory at September 30 using FIFO, LIFO and moving-average cost.
- Compare ending inventory using a perpetual inventory system to ending inventory using a periodic inventory system.
- Which inventory cost flow method (FIFO, LIFO) gives the same ending inventory value under both periodic and perpetual? Which method give different ending inventory values?
Solution
a.
Elsa's Boards
Perpetual Inventory System
FIFO Method
Perpetual Inventory System
FIFO Method
Elsa's Boards
Perpetual Inventory System
LIFO Method
Perpetual Inventory System
LIFO Method
Elsa's Boards
Perpetual Inventory System
Average Method
Perpetual Inventory System
Average Method
b.
Units remaining in ending inventory = 141- 121 = 20
Ending inventory (FIFO Method) = 20 x $105 = $2,100
Ending inventory (LIFO Method) = 20 x $97 = $1,940
Ending inventory is same for both perpetual and periodic methods
c.
FIFO Methods gives the same ending inventory value for both perpetual and periodic methods. LIFO Methods gives the different ending inventory value for both perpetual and periodic methods.