Question & Answer: Alberta Company uses the periodic inventory method and had the following purchases of inventory during the month of D…..

Alberta Company uses the periodic inventory method and had the following purchases of inventory during the month of December. There were 1,400 units sold during the month.

Date         Transaction                       Units                           Unit Cost

12/1      Beginning inventory              500 units               $4 unit cost
12/5      Purchase #1                        600 units                $6 unit cost
12/18    Purchase #2                         500 units                $8 unit cost
12/25    Purchase #3                         400 units                $10 unit cost

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 Dec. 31st?
2. Assume that the company uses the LIFO inventory method. What is the dollar value of the ending inventory on Dec. 31st and the cost of goods sold during December?
3. Assume that the company uses teh FIFO inventory method. What is the dollar value of the ending inventory on Dec. 31st and the cost of goods sold during December?