Inventory Cost Flow Methods and Valuation Techniques: A Comprehensive Analysis

Detailed assessment of inventory valuation methods and cost flow assumptions.

Claire Mitchell

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Inventory Cost Flow Methods and Valuation Techniques: A Comprehensive AnalysisE8-13, E8-14, E8-18, P8-5, E9-19, E9-21, and P9-1.E 8–13-Altira Corporation-Inventory cost flow methods; periodic system●LO1 LO4Altira Corporation uses a periodic inventory system. The following information related to itsmerchandise inventory during the month of August 2011 is available:Required:Determine the inventory balance Altira would report in its August 31, 2011, balance sheet and the costof goods sold it would report in its August 2011 income statement using each of the following cost flowmethods: 1. First-in, first-out (FIFO) 2. Last-in, first-out (LIFO) 3. Average costExercise 8-13Cost of goods available for sale:Beginning inventory(2,000 x $6.10)$12,200Purchases:10,000 x $5.50$55,0006,000 x $5.0030,00085,000Cost of goods available(18,000 units)$97,200First-in, first-out (FIFO)Cost of goods available for sale(18,000 units)$97,200Less: Ending inventory(determined below)(15,000)Cost of goods sold$82,200Cost of ending inventory:

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