Question

Given the following: Number purchased Cost per unit Total January 1 inventory 34 $ 4 $...

Given the following:

Number
purchased		 Cost
per unit		 Total
January 1 inventory 34 $ 4 $ 136
April 1 54 7 378
June 1 44 8 352
November 1 49 9 441
181 $ 1,307

a. Calculate the cost of ending inventory using the LIFO (ending inventory shows 55 units).




b. Calculate the cost of goods sold using the LIFO (ending inventory shows 55 units).

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Homework Answers

Answer #1

a.Cost of ending inventory=(34 units@$4)+(21 units@$7)

=$307

b.Units sold=Beginning inventory+Purchases-Ending inventory

=181-55 units

=126 units

Hence  cost of goods sold using the LIFO=(49 units@$9)+(44 units@$8)+(33 units@$7)

=$1024

As per LIFO;goods purchased last are sold off first.Hence 55 units of ending inventory would comprise of 34 units of beginning inventory and the balance(55-34)=21 units @$7 each of April1.

Cost of goods sold of 126 units would comprise of 49 units@$9 of November 1;44 units @$8 each purchased on June 1 and the balance (126-49-44)=33 units@$7 of April 1.

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