Question

Transactions for the month of June were:

Purchases	Sales
June 1 (balance) 800 at 3.20	June 2 ….600 at $5.50
3…………………….2,200 at 3.10	6………..1,600 at 5.50
7…………………….1,200 at 3.30	9…………1,000 at 5.50
15…………………..1,800 at 3.40	10……….. 400 at 6.00
22……………………..500 at 3.50	18………..1.400 at 6.00
…………………………………………………	25…………..200 at 6.00

Assuming that perpetual inventory system is adopted, the ending inventory on a LIFO basis?

Answer 1

Received Issue Balance

Particulars	Units	Cost	Total	Units	Cost	Total	Units	Cost	Total
Jun 1 purchase	800	3.2	2560				800	3.2	2560
Jun 2 issue				600	3.2	1920	200	3.2	640
Jun 3 Purchase	2200	3.1	6820				200 2200	3.2 3.1	640 6820
Jun 6 issue				1600	3.1	4960	200 600	3.2 3.1	640 1860
Jun 7 purchase	1200	3.3	3960				200 600 1200	3.2 3.1 3.3	640 1860 3960
Jun 9 issue				1000	3.3	3300	200 600 200	3.2 3.1 3.3	640 1860 660
Jun 10 issue				200 200	3.3 3.1	660 620	200 400	3.2 3.1	640 1240
Jun 15 purchase	1800	3.40	6120				200 400 1800	3.2 3.1 3.4	640 1240 6120
Jun 18 issue				1400	3.4	4760	200 400 400	3.2 3.1 3.4	640 1240 1360
Jun 22 purchase	500	3.5	1750				200 400 400 500	3.2 3.1 3.4 3.5	640 1240 1360 1750
Jun 25 issue				200	3.5	700	200 400 400 300	3.2 3.1 3.4 3.5	640 1240 1360 1050

Endin inventory on LIFO basis = 640+1240+1360+1050 = 4290