Question

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:

Aug.1	Inventory on hand—2,700 units; cost $6.80 each.
8	Purchased 13,500 units for $6.20 each.
14	Sold 10,800 units for $12.70 each.
18	Purchased 8,100 units for $5.60 each.
25	Sold 9,800 units for $11.70 each.
28	Purchased 4,700 units for $5.80 each.
31	Inventory on hand—8,400 units.

Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using last-in, first-out (LIFO).

Answer 1

Answer- Ending inventory on August 31, 2021 using LIFO method - $51820.

Cost of goods sold on August 31, 2021 using LIFO method - $122860.

Explanation-

LIFO Method
Goods purchased			Cost of goods sold	Inventory balance
Date	# of units	Cost per unit	# of units sold	Cost per unit	Cost of goods sold	# of units	Cost per unit	Inventory balance
Aug-01						2700	6.80	18360
Aug-08	13500	6.20				2700	6.80	18360
						13500	6.20	83700
Aug-14			10800	6.2	66960	2700	6.80	18360
						2700	6.20	16740
Aug-18	8100	5.60				2700	6.80	18360
						2700	6.20	16740
						8100	5.60	45360
Aug-25			8100	5.60	45360	2700	6.80	18360
			1700	6.20	10540	1000	6.20	6200
Aug-28	4700	5.80				2700	6.80	18360
						1000	6.20	6200
						4700	5.80	27260
Totals			20600		122860	8400		51820