Accounting Help Please.....FIFO and LIFO

[Jbuck2KCivic]

Took a quiz on this last week and scored a 40%. It was a model problem with 5 questions, 20pts a piece. Our teacher gave us the general outline and I plugged in the numbers and still managed to screw it up.

Quiz is one LIFO and FIFO, basically looking for some instruction as how to do the problem. Online class and teacher won't respond to emails.

This was the problem:

ABC Corp. started the year with 970 units of inventory with a cost of $3.30 each. Subsequent purchases of inventory during the year were as follows:
March 1 410 units @ $3.35 each
May 15 690 units @ $3.40 each
July 12 665 units @ $3.55 each
August 2 690 units @ $3.70 each
Nov. 14 215 units @ $3.80 each

During the year 1,785 units were sold for $6.99 each. Calculate the following:

a. Ending inventory value under LIFO.
b. Ending inventory value under FIFO.
c. Ending inventory value under Weighted Average.
d. Total sales ( in $ ) for the year.
e. Gross profit under the FIFO assumption



This was my answer:
Units Available For Sale= 3640
Less Units Sold= 1785
Units In Ending Inventory= 185


A) LIFO
970 x $3.30= 3,201
410 x $3.35= 1,373.50
475 x $3.40= 1,615
1855 units $6,189.50

B) FIFO
215 x $3.80= 817
690 x $3.70= 2,553
950 x $3.55= 3,372.50
1855 units $6,742.50

C) Cost Of Goods Available/ Units For Sale
$21.10 / 3,640= $.0058 x Ending Inventory
$.0058 x 1855
$10.75

D) Total Sales For The Year (in $):
1785 x $6.99= $12,477.15

E) Sales- Cost of Goods Sold= Gross Profit

Cost of Goods Available For Sale - Ending Inventory=Cost Of Goods Sold

CG Available= $21.10
Ending Inventory LIFO= $6742.50

$21.10 - $6742.50= -$6721.40
Cost of goods sold= -$6721.40

Sales-CGS= Gross Profit
$12,477.15- (-$6721.40)= $19,198.55



Correct answers:

b.should be $6,699.75

c. should be $6,455.40

e. should be $6,525.65

You got a and d correct.



I can't figure out what I'm doing wrong. Any help is greatly appreciated!

 

[hooked_on4]

Ok been a while since I had an accounting class and I forget when not in practice......

Refresh my memory why

B) FIFO
215 x 3.80= 817
690 x 3.70= 2553
950 x 3.55= 3372.50
1855 units $6742.50

is 950 units and at $3.55 ?

I don't promise this will help any lol

 

[Jbuck2KCivic]

The 950 comes from subtracting the sum of 215 and 690 from 1855 total units. That comes out to 950.

For the price of $3.55, I guess you just use the next price in line. So it goes 3.80-3.70-3.55

That is starting from the top and working your way down.

Yes it is 950 units @ a price of $3.55

 

[Jbuck2KCivic]

OK just solved the FIFO one, the outline he gave us was worthless so I just started adding number together and got the right answer lol

What I did

215 x 3.80= 817
690 x 3.70= 2553
665 x 3.55= 2360.75
285 x 3.40= 969
1855 $6699.75

Ahh I see now, the original numbers never added to 1855....never caught that.

 

[hooked_on4]

Nice man, helps to speak out loud in this case post a thread to find a solution. I remember how to do FIFO again now, LIFO was always easier.

Thanks for the refresher lol

 

[Jbuck2KCivic]

Done figured everything out after taking a closer look at the problems.

Letter C was f**ked from the beginning lol. Added up the wrong column of number which threw off the answer for E as well. Also I had to have the correct answer to B to get E.