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Stallman Company took a physical inventory on December 31 and determined that goods costing $200,000 were on hand. Not included in the physical count were $25,000 of goods purchased from Pelzer Corporation, FOB, shipping point, and $22,000 of goods sold to Alvarez Company for $30,000, FOB destination. Both the Pelzer purchase and the Alvarez sale were in transit at year-end.
What amount should Stallman report as its December 31 inventory?
In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7, and (3) 200 units at $8. Assuming there are 360 units on hand, compute the cost of the ending inventory under the (a) FIFO method and (b) LIFO method. Bethke uses a periodic inventory system.
A) Cost of the ending inventory LIFO.
B) Cost of the ending inventory.

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Answer:

1. $247,00

A. $2,720

B.$2,220

Explanation:

1. Calculation to determine What amount should Stallman report as its December 31 inventory

Using this formula

December 31 Ending inventory = Inventory count as per physical count + Inventory in transit FOB Shipping point + Inventory in transit FOB destination

Let plug in the formula

December 31 Ending inventory= $200,000 + $25,000+ $22,000

December 31 Ending inventory= $247,000

Therefore What amount should Stallman report as its December 31 inventory is $247,000

A) Calculation to determine the Cost of the ending inventory FIFO.

Cost of ending inventory = (200 units * $8) +(360 units- 200 units * $7)

Cost of ending inventory = (200 units * $8) + (160 units * $7)

Cost of ending inventory= $1,600 + $1,120

Cost of ending inventory= $2,720

Therefore The Cost of ending inventory is $2,720

(b) Calculation to determine The cost of ending inventory under the LIFO method

Cost of ending inventory = (300 units * $6) +(360 units -300 units* $ 7)

Cost of ending inventory = (300 units * $6) + (60 units * $ 7)

Cost of ending inventory = $1,800 + $420

Cost of ending inventory = $2,220

Therefore The cost of ending inventory under the LIFO method will be $2,220

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