Question

Joe's Shoes, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product...

Joe's Shoes, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows:

Beginning Inventory (Jan.1) 16 widgets @ $10

Purchase Jan. 11 14 widgets @ $12

Sale Jan. 14 25 widgets @ $25

Purchase Jan. 20 23 widgets @ $15

Sale Jan. 25 3 widgets @ $25

Calculate End. Inventory under LIFO

COGS=165

Beg Inventory+Purchases-COGS

160+168+345-165=508 ending inventory

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Answer #1

LIFO: Under the LIFO method, it is assumed that the goods purchased last are the goods sold first. So the ending inventory would represent the goods which are purchased first in point of time.

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