Question

Question 10

On January 1 the Whitehouse St Corporation had 40 units of merchandise inventory on hand. Each unit had cost the company $32. During January the company made the following purchases: January 8, 50 units at $34 each and January 21, 60 units at $37 each. The company made the following sales in January: January 10, 42 units at $60 each and January 26, 64 units at $60 each. The company uses the LIFO perpetual inventory method. Calculate the cost of the Corporation's merchandise inventory on hand on January 31.

a. $3,784

b. $1,628

c. $3,572

d. $1,416

Answer 1

Calculate cost of merchandise inventory on hand on january 31 :

Date	# of units	cost per unit	purchase cost	# of unit	Cost per unit	cost of goods sold	# of units	cost per unit	ending invenotry
Jan 1							40	32	1280
Jan 8	50	34	1700				40 50	32 34	1280 1700
Jan 10				42	34	1428	40 8	32 34	1280 272
Jan 21	60	37	2220				40 8 60	32 34 37	1280 272 2220
Jan 26				60 4	37 34	2220 136	40 4	32 34	1280 136

Ending inventory = 1280+136 = 1416

so answer is d) $1,416