Wittmann Co. began operations on July 1. It uses a perpetual inventory system During July, the company had the following purchases and sales.
Instructions
- Determine the ending inventory under a perpetual inventory system using (1) FIFO, (2) moving-average cost, and (3) LIFO.
- Which cost flow method produces the highest ending inventory valuation?
Solution
a.
1.
Wittmann Co.
FIFO Method
Ending Inventory
FIFO Method
Ending Inventory
2.
Moving-average cost Method
Ending Inventory
Ending Inventory
3.
Wittmann Co.
FIFO Method
Ending Inventory
FIFO Method
Ending Inventory
b.
From the Solution (a), We can say that FIFO shows the highest ending inventory amount for the balance sheet
