Question

Given the following: Number purchased Cost per unit Total January 1 inventory 31 $ 4 $...

Given the following:

Number
purchased

Cost
per unit

Total

January 1 inventory

31

$

4

$

124

April 1

51

7

357

June 1

41

8

328

November 1

46

9

414

169

$

1,223

a. Calculate the cost of ending inventory using the LIFO (ending inventory shows 52 units).



b. Calculate the cost of goods sold using the LIFO (ending inventory shows 52 units).

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Homework Answers

Answer #1

Goods sold=Total units available-Ending inventory

=169-52

=117 units

As per LIFO;goods purchased last are sold off first.

Hence 117 units sold would consist of 46 units of November 1;41 units of June 1 and balance=(117-46-41)=30 units of April 1

Hence cost of goods sold=(46 units@$9)+(41 units@$8)+(30 units@$7)

=$952

Hence ending inventory would consist of =(51-30)=21 units of April 1 and 31 units of January 1 inventory

Hence ending inventory=(21 units@$7)+(31 units@$4)

=$271

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