Question

Required information

[The following information applies to the questions displayed below.]

Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Greg's Bicycle Shop uses a periodic inventory system.

Date			Transactions	Units				Unit Cost				Total Cost
March	1		Beginning inventory		20			$	180				$	3,600
March	5		Sale ($260 each)		15
March	9		Purchase		10				200					2,000
March	17		Sale ($310 each)		8
March	22		Purchase		10				210					2,100
March	27		Sale ($335 each)		12
March	30		Purchase		7				230					1,610
													$	9,310

  rev: 02_28_2017_QC_CS-80932

3. Using LIFO, calculate ending inventory and cost of goods sold at March 31.
  

Answer 1

Under LIFO method goods purchase last are sold first

Cost of goods sold

= March 5 sale will be from beginning inventory + March 17 sale will be from March 9 purchase + March 22 sale will be from 10 units from March 22 and 2 units from March 9 purchase

Cost of goods sold = 15*180 + 10*200 + 10*210 =

= 2700 + 2000 + 2100

= $6,800

Closing inventory will be beginning inventory of 5 units and 7 units from purchase on March 30

Valuation will be

= 5*180 + 7*230

= 900 + 1610

= $2,510

If you find the answer helpful please upvote.