Carson Company’s usage of LIFO and FIFO Inventory Methods-Multiple Choice Question

Question

Periodic Inventories:

Carson Company uses the periodic inventory method and had the following inventory information available for the month of November.

Date             Transaction                   Units                  Unit Cost

11/1         Beginning inventory            400                        $3

11/5               Purchase No. 1             500                          $5

11/12                 Sale No. 1                 450 

11/18              Purchase No. 2            500                          $6

11/25             Sale No. 2                     900

11/30            Purchase No. 3              600                          $7 

A physical count of units on November 30 revealed that 650 units were on hand.

Answer the following independent questions and show computations supporting your answers.

1. Assume that the company uses the average cost method. What is the dollar value of the ending inventory on November 30?

2. Assume that the company uses the LIFO inventory method. What is the dollar value of the cost of goods sold during November?

3. Assume that the company uses the FIFO inventory method. The dollar value of the ending inventory on November 30 is: