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Review Exercise
The following transactions took place at Mike’s Tikes Toys during the month of March 2016.The
company uses a periodic inventory system.There are 100 items in opening inventory that cost
$12 each.
Mar 3
Purchased 500 items at a cost of $15 each on credit (on account).
Mar 10 Sold 200 items at $45 each on credit.
Mar 12 Purchased 300 items at $18 each on credit.
Mar 20 Sold 300 items at $50 each for cash.
Required
a) Using the specific identification method, prepare the inventory record to demonstrate the
closing inventory balance after the above transactions. Assume that 50 items were sold from
opening inventory, 350 items were sold from the purchase on March 3, and 100 items were
sold from the purchase on March 12.
b) Using the FIFO method, prepare the inventory record to demonstrate the closing inventory
balance after the above transactions.
c) Using the weighted-average cost method, prepare the inventory record to demonstrate the
closing inventory balance after the above transactions.
See Appendix I for solutions.
a) Specific Identification
Date
Purchases
Sales
Balance
Quantity Unit Cost Value Quantity Unit Cost Value Quantity Unit Cost Value
Sales for the Month
Ending Inventory
Chapter 8 Appendix
Inventory Valuation
