Warnerwoods compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 115 units from beginning inventory and 245 units from the March 5 purchase; the March 29 sale consisted of 95 units from the March 18 purchase and 135 units from the March 25 purchase.

Explanation:

FiFo:

fifo means first come first out, goods purchased first are sold first.

Date       Units  

opening  115

5-Mar        245

18-Mar         95

25-Mar         135

assume company sold 150 units under the fif method we dispose as follows

1st we will sell 115 opening units reaming 45 units from 245 merch 5th purchase. remaining units cost will be closing stock cost.

Lifo  :

under the lifo method the goods purchased earliest will be sold first continuing with above example disposal of units will be as follows:

first of all we sell earliest purchased goods those are 25th march goods 135 units remaining 15 units will be sold from 18th purchases 95 units.

the closing cost of goods will be the =opening +5th march purchases and 18th march 80 units.

weighted average:

under the weighted average units are mixed and their cost is calculated on the basis of total cost divided by total units. goods sold can be from any of previous purchases.

continuing with the above example disposal of 150 units will be the mixture of total purchases and it can be from specific purchases.

the closing cost of goods will be the = remaining units and their cost

specific identification:

under the specific method no rules are followed goods are sold on the will of entity they can be from any date as specified in the question and closing cost of the goods will be the remaining purchases and their relevant cost of units.

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