Question

Boxwood Company sells blankets for $31 each. The following was taken from the inventory records during May.  The company had no beginning inventory on May 1.

Date	Blankets	Units	Cost
May 03	Purchase	7	$27
10	Sale	5
17	Purchase	9	$29
20	Sale	4
23	Sale	3
30	Purchase	11	$31

Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the LIFO inventory cost method.

a.$87

b.$341

c.$116

d.$135

could you also please explain whether I multiply 4*29 or 4*31 using the LIFO method as well please?

Answer 1

Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the LIFO inventory cost method.
a.$87
b.$341
c.$116	Correct Answer
d.$135
could you also please explain whether I multiply 4*29 or 4*31 using the LIFO method as well please?
Under perpetual Inventory for valuing cost of sale on a particular date you have to take cost of purchase
on the date of sale or immediate prior to that
Sale was on 20-May   4 Unit
Purchase immediate prior to the sale is on 17-May @ $29 per unit.
So you have to take the rate for cost of goods sold to $29
So the cost of merchadise sold 4*29
The amount of cost of sale = $116