Question

Putter's Paradise​ carries an inventory of putters and other golf clubs. The sales price of each putter is $128. Company records indicate the following for a line of Putter's Paradise​'s putters:

Date	Item	Quantity	Unit Cost
Apr.1	Balance	22	$60
Apr.6	Sale	12
Apr.8	Purchase	25	$81
Apr.17	sale	25
Apr.30	sale	7

Requirement:

1. Prepare Putter's Paradise​'s perpetual inventory record for the putters assuming Putter's Paradise uses the LIFO inventory costing method. Then identify the cost of ending inventory and cost f goods sold for the month.

2. Journalize the Putter's Paradise​'s inventory transaction using the LIFO inventory costing method. ( Assume purchase and sales are made on account)

Answer 1

Potter's Paradise:

1. Cost of ending inventory & Cost of goods sold.

Ending inventory	3 × $60	$ 180
Cost of goods sold	(12×$60) + (25×$81) + (7×$60)	$ 3,165

Ending inventory (quantity) = Opening + Purchases - Closing

= (22+25) - (12+25+7) = 3 units

2. Journalization:

Date	Particulars	Dr	Cr
April 6th	Bank a/c Dr (12 ×$128)	$1536
	To Sales a/c		$1536
April 8th	Purchases a/c Dr (25×$81)	$2025
	To Cash a/c		$2025
April 17th	Bank a/c Dr (25×$128)	$3200
	To Sales a/c		$3200
April 30th	Bank a/c Dr (7×$128)	$896
	To Sales a/c		$896