Question

Required information

Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018:

Aug.1	Inventory on hand—3,900 units; cost $8.00 each.
8	Purchased 19,500 units for $7.40 each.
14	Sold 15,600 units for $13.90 each.
18	Purchased 11,700 units for $6.60 each.
25	Sold 14,600 units for $12.90 each.
31	Inventory on hand—4,900 units.

2. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the LIFO method. (Round "Cost per Unit" to 2 decimal places.)

Answer 1

	Purchase			cost of goods sold			Ending inventory
	unit	cost	Total	Unit	cost	Total	Unit	cost	total
Aug 1							3900	8	31200
Aug 8	19500	7.4	144300				3900	8	31200
							19500	7.4	144300
Aug 14				15600	7.4	115440	3900	8	31200
							19500-15600=3900	7.4	28860
Aug 18	11700	6.6	77220				3900	8	31200
							3900	7.4	28860
							11700	6.6	77220
Aug 25				11700	6.6	77220	3900	8	31200
				14600-11700=2900	7.4	21460	3900-2900 = 1000	7.4	7400
Total						214120			31200+7400=38600

Inventory Balance : 31200+7400 = $ 38600

Cost of goods sold : 214120