Question

Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.

The following transactions, relating to the “Italia” brand were completed during the quarter: October 5 Purchased 15 pairs of lamps at a cost of $17,020 per pair. October 14 Sold 18 pairs of lamps to Muller Furnishings at $22,250 per pair October 22 Purchased 24 pairs at a cost of $18,175 per pair but the supplier gave a 4% quantity discount. November 10 Sold 15 pairs of lamps to Orion Household Ltd and 10 pairs to Brown’s Furnishings which yielded total sales revenue of $589,750. November 12 Owing to an increased demand for this product, 30 pairs of lamps were purchased on account at a cost of $17,612 per pair. In addition, Esperado paid $288 in cash on each pair of lamps to have the inventory shipped from the vendor’s warehouse to Esperado’s showroom. November 27 Sold 23 pairs of lamps to Middletown Company at a price of $25,080 per pair. November 30 An actual count of inventory was carried out which revealed that there were 15 pairs of the “Italia” brand in the warehouse. December 2 In preparation for the festive season, Esperado purchased 25 pairs of lamps at a total cost of $474,500. December 15 5 pairs of the lamps purchased on December 2 were returned to the supplier, as they were not of the brand ordered. December 30 Sold 22 pairs of lamps to two customers (Omega Traders & Middleton Furnishings) at a selling price of $26,550 per pair. All purchases were on account and received on the dates stated. Required:

1. iv) Assuming that Esperado sold 86 pairs of “Italia” brand of lamps during the quarter; determine the value of ending inventory and cost of goods sold assuming the business used the periodic system and the LIFO method?

Please use the format provide below

ESPERADO FURNISHINGS

Periodic Inventory Record “Italia” Table Lamps (LIFO Method)

Goods Available For Sale:
?	?			$?
Purchases:
?	?	$?
?	?	$?
?	?	$?
?	?	$?	$?
?	?	$?	?
?			?
?	___		?	____?
?	?			$?

Answer 1

ESPERADO FURNISHINGS

Periodic Inventory Record “Italia” Table Lamps (LIFO Method)

Purchase			Sales		Closing
Date	Quantity	Rate	Date	Quantity	Date	Quantity	Rate
					30-Sep	10	1,68,200.00
Oct-05	15	2,55,300.00			Oct-05	10	1,68,200.00
					Oct-05	15	2,55,300.00
			Oct-14	18	Oct-14	7	1,17,740.00
Oct-22	25	4,36,200.00			Oct-22	7	1,17,740.00
					Oct-22	25	4,36,200.00
			Nov-10	15
			Nov-10	10	Nov-10	7	1,17,740.00
Nov-12	30	5,28,648.00			Nov-12	7	1,17,740.00
					Nov-12	30	5,28,648.00
			Nov-27	23	Nov-27	7	1,17,740.00
					Nov-27	7	1,23,351.20
Nov-30	1	17,220.80			Nov-30	7	1,17,740.00
					Nov-30	7	1,23,351.20
					Nov-30	1	17,220.80
Dec-02	25	4,74,500.00			Dec-02	7	1,17,740.00
					Dec-02	7	1,23,351.20
					Dec-02	1	17,220.80
					Dec-02	25	4,74,500.00
Dec-15	-5	-94,900.00			Dec-15	7	1,17,740.00
					Dec-15	7	1,23,351.20
					Dec-15	1	17,220.80
					Dec-15	20	3,79,600.00
			Dec-30	22	Dec-30	7	1,17,740.00
			Dec-30	-2	Dec-30	7	1,23,351.20
					Dec-30	1	17,220.80
				Closing	stock		2,58,312.00

Note:

1. The difference in the stock record and actual valuation is added to the value of the closing stock. Value of such stock calculated on the basis of Weighted average cost.

2. As per data give, Total no of goods sold 88 so add back the additional good sold for calculating the Closing stock.