Question

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

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- 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