Question

If Dave’s Doors uses the Last-in First-out (LIFO) costing system, it is assumed that the last units “available for sale” are the first units sold. Therefore, Dave’s will sell its purchases made on 9/18 first, then units that they purchased on 9/12, etc. until they have accounted for the 45 units sold. Use the table for Dave’s FIFO Costing to complete the requirements below.

	Dave’s LIFO Costing
		Number of units	Cost per unit	Total Costs
Beginning Inventory—Sold Last
Purchase made 9/4
Purchase made 9/12
Purchase made 9/18 – First units sold
Total units sold		45 units sold

Since the 45 units sold is more than the units purchased on 9/18, we know that of these units were sold. Include the units, cost per unit and Total Costs for the 9/18 purchase in the table above. Use the data in your table from 6) above.

How many doors would Dave’s have sold from the units they purchased on 9/12? _______ Include the units, Cost per unit and Total costs for this row in the table above.

Complete the table determining how many units from each purchase Dave’s would have sold until the total equals the 45 units. Total the column “Total Costs” Hint: The number of units listed from beginning Inventory will be less than what was originally in beginning inventory in the Table 6) above.

Write the journal entry to record Dave’s expense (COGS)

Assume Dave’s sold these doors to customers for $480 each. Write the journal entry to record Dave’s revenue.

What is Dave’s Gross Margin for the period under the LIFO costing method?

Determine the value of ending inventory under the LIFO costing method.

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Answer 1