Tori Amos Corporation began operations on December 1, 2013. The only inventory transaction in 2013 was the purchase of inventory on December 10, 2013, at a cost of $20 per unit. None of this inventory was sold in 2013. Relevant information is as follows.
Ending inventory units
December 31, 2013 100
December 31, 2014, by purchase date
December 2, 2014 100
July 20, 2014 50 150
During the year 2014, the following purchases and sales were made.
Purchases
Sales
March 15 300 units at $24 April 10 200
July 20 300 units at 25 August 20 300
September 4 200 units at 28 November 18 150
December 2 100 units at 30 December 12 200
The company uses the periodic inventory method.
Tori Amos Corporation began operations on December
Tori Amos Corporation began operations on December
Calculate average-cost per unit. (Round answer to 2 decimal places, e. e. 2.76.)
Average-cost
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Tori Amos Corporation began operations on December
Tori Amos Corporation began operations on December
Determine ending inventory under (1) specific identification, (2) FIFO, (3) LIFO, and (4) average-cost. (Round answer to 0 decimal places, e. g. 2,760.)
Specific Identification
FIFO
LIFO
Average-Cost
Ending Inventory
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$Entry field with correct answer
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$Entry field with incorrect answer now contains modified data
Tori Amos Corporation began operations on December
Tori Amos Corporation began operations on December
Calculate price index. (Round answer to 4 decimal places, e. g. 2.7600.)
Price Index
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Tori Amos Corporation began operations on December
Tori Amos Corporation began operations on December
Determine ending inventory using dollar-value LIFO. Assume that the December 2, 2014, purchase cost is the current cost of inventory. (Hint: The beginning inventory is the base-layer priced at $20 per unit.) (Round answer to 0 decimal places, e. g. 2,760.)
Ending inventory at dollar-value LIFO
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Average cost = $25.30

Ending inventory valuation

A. Specific identification = $4,400

B. FIFO = $4,400

C. LIFO = $3,200

D. Weighted Average = $4,081.50

Price index

Price 1 = $20

Price 2 = $24

Price index = (24 - 20)/ 20 x 100% = 20%

Price 3 = $25

Price index = (25 - 24)/ 24 x 100% = 4.2%

Price 4 = $28

Price index = (28 - 25)/ 28 x 100% = 10.7%

Price 5 = $30

Price index = (30 - 28)/ 30 x 100% = 6.7%

However if the price index is between 2013 and 2014

Price 1 = $20

Price 5 = $30

Price index = (30 - 20)/ 20 x 100% = 50%

D. Based on LIFO and a stock valuation of $30 per unit of stock as at Dec 2.

The ending inventory will be $4,500

Explanation:

Tori Amos

Weighted Average Costs.

First purchase 100 units at $20 = $2,000

2nd purchase = 300 units at $24 = $7,200

3rd purchase = 300 units at $25 = $7,500

4th purchase = 200 units at $28 = $5,600

5th purchase = 100 units at $30 = $3,000

Total purchase = 1,000 units

Total costs = $25,300

Average costs = $25,300 divided by 1,000

= $25.30

Ending inventory Valuation

Based on Specific identification method.

This method identified each item of inventory as a unique stock item and only depletes that stock item when it is sold. In this instance, we haven't been guided on the specifics of each purchase, hence I will apply the FIFO method for this application.

FIFO (First in First Out) is an inventory method that depletes stock usage starting from the oldest stock in hand .

First purchase 100 units at $20 = $2,000

2nd purchase = 300 units at $24 = $7,200

First sale = 200 units

3rd purchase = 300 units at $25 = $7,500

2nd sale = 300 units

4th purchase = 200 units at $28 = $5,600

3rd sale = 150 units

5th purchase = 100 units at $30 = $3,000

4th sale = 200 units

Total purchase = 1,000 units

Total Sales = 850 units

Total balance costs = (50 at $28 + 100 at $30) = $4,400

LIFO (Last in First Out) is an inventory method that depletes stock usage starting from the newest stock in hand .

First purchase 100 units at $20 = $2,000

2nd purchase = 300 units at $24 = $7,200

First sale = 200 units

3rd purchase = 300 units at $25 = $7,500

2nd sale = 300 units

4th purchase = 200 units at $28 = $5,600

3rd sale = 150 units

5th purchase = 100 units at $30 = $3,000

4th sale = 200 units

Total purchase = 1,000 units

Total Sales = 850 units

Total balance costs = (100 at $20 + 50 at $24) = $3,200

WEIGHTED AVERAGE

Is an inventory method that appropriates cost of new additions to older stock balances to arrive at an average cost valuation for all stock in hand .

First purchase 100 units at $20 = $2,000

2nd purchase = 300 units at $24 = $7,200

Average cost = 400 units at $23 = balance cost of $9,200

First sale = 200 units at $23

Balance stock = 200 units at $23 = $4,600

3rd purchase = 300 units at $25 = $7,500

Average cost = 500 units at $24.2 = balance cost of $12,100

2nd sale = 300 units at $24.20

Balance stock = 200 units at $24.20 = $4,840

4th purchase = 200 units at $28 = $5,600

Average cost = 400 units at $26.1 = balance cost of $10,440

3rd sale = 150 units at $26.1

Balance stock = 250 units at $26.1 = $6,525

5th purchase = 100 units at $30 = $3,000

Average costs = 350 units at $27.21 = balance costs of $9,525

4th sale = 200 units at $27.21

Balance units = 150 units at $27.21 = $4,081.50

Price index

Is an approach at measuring change between a base price and a current price expressed in percentage or bases points.

Price 1 = $20

Price 2 = $24

Price index = (24 - 20)/ 20 x 100% = 20%

Price 3 = $25

Price index = (25 - 24)/ 24 x 100% = 4.2%

Price 4 = $28

Price index = (28 - 25)/ 28 x 100% = 10.7%

Price 5 = $30

Price index = (30 - 28)/ 30 x 100% = 6.7%

However if the price index is between 2013 and 2014

Price 1 = $20

Price 5 = $30

Price index = (30 - 20)/ 20 x 100% = 50%

LIFO with variation in prices

If the current cost of inventory is $30 per the question given:

Total balance stock at Dec 2 2014 = 350 units

Total Costs = $30 x 350 = $10,500

4th sales = 200 units

Total balance costs = (150 at $30) = $4,500