91Ó°ÊÓ

The following units of a particular item were available for sale during the year: \(\begin{array}{ll}\text { Beginning inventory } & 20 \text { units at } \$ 45 \\\ \text { Sale } & 15 \text { units at } \$ 80 \\ \text { First purchase } & 31 \text { units at } \$ 47 \\ \text { Sale } & 27 \text { units at } \$ 80 \\\ \text { Second purchase } & 40 \text { units at } \$ 50 \\ \text { Sale } & 35 \text { units at } \$ 80\end{array}\) The firm uses the perpetual inventory system, and there are 14 units of the item on hand at the end of the year. What is the total cost of the ending inventory according to (a) fifo, (b) lifo?

The units of an item available for sale during the year were as follows: \(\begin{array}{lrlr}\text { Jan. } & 1 & \text { Inventory } & 6 \text { units at } \$ 28 \\ \text { Feb. } 4 & \text { Purchase } & 12 \text { units at } \$ 30 \\ \text { July } 20 & \text { Purchase } & 14 \text { units at } \$ 32 \\\ \text { Dec. } 30 & \text { Purchase } & 8 \text { units at } \$ 33\end{array}\) There are 11 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost by (a) the first-in, firstout method, (b) the last-in, first-out method, and (c) the average cost method.

The merchandise inventory was destroyed by fire on May 17 . The following data were obtained from the accounting records: \(\begin{array}{llr}\text { Jan. 1 } & \text { Merchandise inventory } & \$ 180,000 \\ \text { Jan. 1-May 17 } & \text { Purchases (net) } & 750,000 \\\ & \text { Sales (net) } & 1,250,000 \\ & \text { Estimated gross profit rate } & 35 \%\end{array}\) a. Estimate the cost of the merchandise destroyed. b. Briefly describe the situations in which the gross profit method is useful.