Question

A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during the month of January were as follows:

January 1	Begining balance of 18 units at $13 each
january 12	Purchased 30 units at $14 each
january 19	Sold 24 units at $30 selling price each
january 20	Purchased 24 units at $17 each
january 27	Sold 27 units at $30 selling price each

Required: Using the LIFO method of valuation, determine the cost of sales and value of the ending inventory.

Answer 1

Schedule :

Date	Quantity purchase	Unit cost	Total cost	Quantity sold	Unit cost	Total cost of goods sold	Quantity remaining	Unit cost	Ending inventory
Jan 1							18	13	234
Jan 12	30	14	420				18 30	13 14	234 420
Jan 19				24	14	336	18 6	13 14	234 84
Jan 20	24	17	408				18 6 24	13 14 17	234 84 408
Jan 27				24 3	17 14	408 42	18 3	13 14	234 42
Total						786			276

Cost of sale = 786

Ending inventory = 276