Page 311 - Accounting Principles (A Business Perspective)

7. Measuring and reporting inventories

Solution to demonstration problem
Solution to demonstration problem A a. The ending inventory is 5,000 units, calculated as follows:
Units
Beginning inventory 6,250
Purchases 23,750
Goods available 30,000
Sales 25,000
Ending inventory 5,000
Ending inventory under specific identification:

Purchased Units Unit Total
Cost Cost
November 20 2,500 $3.72 $ 9,300
August 12 2,500 3.48 8,700
$ 18,000

2. Ending inventory under FIFO:
(a) Perpetual:

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