# FIFO and LIFO accounting?

jeffersons copy center uses laser printers. assume jefferson started the year with 92 containers of ink (average cost of 9.00\$ each, FIFO cost of 8.90\$ each, LIFO, cost of 8.05\$ each). during the year, jefferson purchased 680 containers of ink at 9.80\$ and sold 580 units for 20.25\$ each. jefferson paid operating expenses throughout the year, a total of 3,750\$. jefferson is not subject to income tax.

i need to calculate J's net income for the current year ended december 31, under the average, fifo and lifo inventory costing methods

net income:___________

fifo:_______________

lifo:______________

average:____________

thank you very much in advance and if you have any helpful sites, it could be helpful together with how you got the answers!

Relevance
• Don G
Lv 7
9 years ago

You need to learn how to compute Cost of Goods Sold under the 3 methods.

Under FIFO, BB 92 @ 8.90 + 680 @ 9.80. Sold 580, of which 92 were @ 8.90 and the balance @ 9.80, leaving an EB of 192 @ 9.80.

Under LIFO, BB 92 @ 8.05 + 680 @ 9.80. Sold 580, all from the 680 purchased @ 9.80. EB of 192 includes 100 @ 9.80 and 92 @ 8.05

Under AVG, BB 92 @ 9.00 (828) + 680 @ 9.80 (6,664) = 7,492 / 772 for AVG 9.7047.

Sold 580 at 9.7047, leaving EB of 192 @ 9.7047.

Sales 580 @ 20.25, less Cost Of Goods Sold, as above, less Expenses of 3,750 = Net income