Calculate The Balance In Ending Inventory 541085

Polar Inc. sells air conditioners. On January 1, 2012, they had 5,000 air conditioner units in inventory.

If Polar reported inventory on a FIFO basis, its beginning inventory balance would include the following:

Year units were purchasedNumber of unitsCost per unit

20101,000$500
20114,000$600

If Polar reported inventory on a LIFO basis, its beginning inventory balance would include the following:

Year units were purchasedNumber of unitsCost per unit

19982,000$300
20023,000$400

During 2012, Polar purchased 5,000 air conditioner units. Related costs were as follows:

Paid to supplier$3,500,000
Freight-in charges 100,000
Selling commissions 200,000

During 2012, Polar sold 6,000 air conditioner units at a price of $1,200 each. Polar uses a periodic inventory system.

a.Calculate Cost of Sales for 2012 if Polar, Inc. uses periodic LIFO to value inventory.

b.Calculate the balance in ending inventory on December 31, 2012 if Polar, Inc. uses periodic FIFO to value inventory.