# e6-14 - method Solution a FIFO method(36 units*\$165 14...

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The units of an item available for sale during the year were as follows: Jan. 1 Inventory 27 units at \$120 Feb. 17 Purchase 54 units at \$138 July 21 Purchase 63 units at \$156 Nov. 23 Purchase 36 units at \$165 There are 50 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost by (a) the firstin, first-out method, (b) the last-in, first-out method, and (c) the average cost
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Unformatted text preview: method. Solution: a. FIFO method (36 units*\$165 +14 units*\$156) = \$5,940 + \$2,184 = \$8,124 b. (27 units*\$120 + 23 units*\$138) = \$3,240 + \$3,174 = \$6,414 c. \$7,350 (50 units at \$147; \$26,460/180 units = \$147) Cost of merchandise available for sale: 27 units at \$120 = \$ 3,240 54 units at \$138= 7,452 63 units at \$156= 9,828 36 units at \$165= 5,940 180 units (at average cost of \$147= \$26,460...
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