Question

Kam Company has the following units and costs:

		Units		Unit Cost
Inventory, Jan. 1		8,000		$11
Purchase, June 19		13,000		12
Purchase, Nov. 8		5,000		13

If 9,000 units are on hand at December 31, what is the cost of the ending inventory under LIFO using a periodic inventory system?

Answer 1

LIFO Periodic

Units Available for Sale	= 8000 + 13000 + 5000	= 26000
Units in Ending Inventory	= 9000

Units Sold – 26000-9000 = 17000

Cost of Goods Sold	Units	Unit Cost	Total
Sales From Nov 8 Purchase	5000	$13.00	$65,000
Sales From June 19 Purchase	12000	$12.00	$144000
	17000		$ 209000

Ending Inventory	Units	Unit Cost	Total
Inventory From June 19 Purchase	1000	$12.00	$12000
Inventory From Jan 1 (Opening Stock)	8000	$11.00	$88000

Thus Cost of Ending Inventory i.e. 9000 Units of Kam Company Under LIFO Periodic System is : $100000 ( $12000+$ 88000)