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1. XYZ Company is a startup company, and it has purchased inventory as follows: Date Quantity Price 2/1/16 1000 1.05 3/1/16 500 1.10 5/1/16 800 1.00 6/1/16 1500 .90 7/1/16 2500 1.02 8/1/16 750 1.15 Assume you have...

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Accounting

1. XYZ Company is a startup company, and it has purchasedinventory as follows:

DateQuantityPrice
2/1/1610001.05
3/1/165001.10
5/1/168001.00
6/1/161500.90
7/1/1625001.02
8/1/167501.15

Assume you have sold 2,250 units in 2016.

Given that fact, how much would inventory be valued on thebalance sheet under the following methods and how much Cost ofGoods Sold would be recognized as well?

a. LIFO Method

b. FIFO Method

c. Average Cost Method

Answer & Explanation Solved by verified expert
4.2 Ratings (780 Votes)
All working forms part of the answer Working for Ending no of units Units purchased 1000 500 800 1500 2500 750 7050 units Units sold 2250 units Ending Inventory units 7050 2250 4800 units Requirement a LIFO Method Under LIFO method ending Inventory is first valued on the earliest purchases then moving    See Answer
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Transcribed Image Text

1. XYZ Company is a startup company, and it has purchasedinventory as follows:DateQuantityPrice2/1/1610001.053/1/165001.105/1/168001.006/1/161500.907/1/1625001.028/1/167501.15Assume you have sold 2,250 units in 2016.Given that fact, how much would inventory be valued on thebalance sheet under the following methods and how much Cost ofGoods Sold would be recognized as well?a. LIFO Methodb. FIFO Methodc. Average Cost Method

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