253
Figure 8A.6 shows the results from the perpetual inventory system using the same example.
Compare the values in Figures 8A.5 and 8A.6. Specific identification will always provide the same
values under both systems since the company is able to specifically identify which items are being
sold, regardless of the inventory system being used. FIFO will also provide the same values under
both systems because the most recent purchases are always in ending inventory.
Perpetual Inventory System Specific
Identification
FIFO
Weighted-
Average Cost
Inventory Available for Sale
$1,580
$1,580
$1,580
(beginning inventory + purchases)
Ending Inventory
790
810
736
Value of COGS
790
770
844
________________
FIGURE 8A.6
The weighted-average cost method shows different values for ending inventory and COGS. This
is because the perpetual inventory system assigns costs as the items are sold, whereas the periodic
inventory system only assigns costs at the end of the period.
Chapter 8 Appendix
Inventory Valuation
