Lakshmi Ltd. reports the following inventory transactions in a periodic inventory system for the month of June.

Question:

Lakshmi Ltd. reports the following inventory transactions in a periodic inventory system for the month of June. A physical inventory count determined that 1,600 units were on hand at the end of the month.
Lakshmi Ltd. reports the following inventory transactions in a periodic

Instructions
(a) Determine the cost of the ending inventory and cost of goods sold using (1) FIFO and (2) average cost. (For average cost, use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.)
(b) For item 2 of part (a), explain why the average unit cost is not
$6.50[($5+$6+$7+$8)÷4]
$6.50 [($5+$6+$7+$8)÷4].
(c) By how much do the results for part (a) differ from E6.6, where the same information was used in a perpetual inventory system? Why?

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Related Book For  book-img-for-question

Financial Accounting Tools for Business Decision Making

ISBN: 978-1119368458

7th Canadian edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine

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