inventory accounting

Inventory Valuation

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Lewis Corporation
Case: 6-2
Page: 173
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Lewis Corporation
Traditionally used inventory valuation method:
FIFO
Uses periodic inventory system

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Inventory Transaction 2005-2007
No. of Cartons Price per Carton
2005 2006 2007 2005 2006 2007
Beginning balance 1840 1020 1040 $20.00
Purchases
600 700 1000 $20.25 $21.50 $22.50
800 700 700 $21.00 $21.50 $22.75
400 700 700 $21.25 $22.00 $23.00
200 1000 700 $21.50 $22.25 $23.50
Sales
2820 3080 2950 $34.00 $35.75 $35.75
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Discussion Question
Calculate the cost of goods sold and year-end inventory amounts for 2005, 2006, and 2007 using.., • FIFO
• LIFO
• Average cost method

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Cartons
2005
Cost of goods sold

Inventory

2006
Cost of goods sold

Inventory

2007
Cost of goods sold

Inventory

1840
600
380

2820
420
400
200
1020

FIFO
Price
$20.00
$20.25
$21.00

$36,800.00
$12,150.00
$7,980.00

$21.00
$21.25
$21.50

$56,930.00
$8,820.00
$8,500.00
$4,300.00
$21,620.00

420
400
200
700
700
660
3080
40
1000
1040

$21.00
$21.25
$21.50
$21.50
$21.50
$22.00

40
1000
1000
700
210
2950
490
700

$22.00
$22.25
$22.50
$22.75
$23.00

1190

Value

Inventory Valuation
LIFO
Cartons Price

$22.00
$22.25

$23.00
$23.50

$8,820.00
$8,500.00
$4,300.00
$15,050.00
$15,050.00
$14,520.00
$66,240.00
$880.00
$22,250.00
$23,130.00
$880.00
$22,250.00
$22,500.00
$15,925.00
$4,830.00
$66,385.00
$11,270.00
$16,450.00
$27,720.00

200
400
800
600
820
2820
1020

$21.50
$21.25
$21.00
$20.25
$20.00

Value

Average Cost
Cartons Price
Value

$4,300.00
$8,500.00
$16,800.00
$12,150.00
$16,400.00
$58,150.00
$20,400.00

2820
1020

$20,400.00

1020

$22.25
$22.00
$21.50
$21.50

$22,250.00
$15,400.00
$15,050.00
$14,620.00

3080

3080
20
1020
1040

$21.50
$20.00

$67,320.00
$430.00
$20,400.00
$20,830.00

3080
1040

700
700
700