Financial accounting... FIFO & LIFO?

Question

I have been trying to figure this thing out for a long time, I can't take it anymore!! lol Can someone help me please???

Trey Monson starts a merchandising business on December 1 and enters into three inventory purchases:

December 7 - 10 units @ $7 cost

December 14 -20 units @ $8 cost

December 21 - 15 units @ $10 cost

Monson sells 15 units for $20 each on December 15. Eight of the sold units are from the December 7 purchase and seven are from the December 14 purchase. Monson uses a perpetual inventory system.


1. Determine the costs assigned to the December 31 ending inventory based on LIFO.

Ending inventory =

2.Determine the costs assigned to the December 31 ending inventory based on weighted average. (Round your final answer to the nearest dollar amount. )

Ending inventory:


My answer for #1 is: 230 but the book says is wrong.

My answer for #2 is: 253 but the book says is wrong.


Help!

Thanks Wayne!! Perfect answer!!

Answer 1

It has been a while since I have done this but here goes a try:

For #1: My answer = $260

For a LIFO system, the last units in were considered sold first. So all 15 sold on 12/15 were from 12/14 purchase at $8 each. The last purchase occured after this sale. Therefore his ending inventory should be;

10 units at $7 each = $70
5 units at $8 each = $40
15 units at $10 each = $150
Total = $260

For #1: My answer = $265

After the first two purchases he has 30 units that cost $230. This is an average cost of $7.67. Subtract out the 15 sold. This leaves 15 at $7.67 plus your last purchase.

15 units at $7.67 each = $115
15 units at $10 each = $150
Total = $265

Good luck....and let me know if I am correct......

Answer 2

2 unit remain form Dec 7, 13 remain from Dec 14.
so on Dec 31: 2@$7 + 13@$8 + 15@$10 = $14+$104+$150
=$268

30 units in inventory. acquired 45 units total at total cost $380.
average cost/unit = $8.44
cost for 30 units = $253.33 or $253