Question

Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales for Item HM46 are as follows:

March 1		Inventory	84 units @ $15
5		Sale	67 units
11		Purchase	93 units @ $17
21		Sale	78 units

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on March 21 and (b) the inventory on March 31.

a. Cost of merchandise sold on March 21
b. Inventory on March 31

Answer 1

Date	Purchase	Cost of goods sold	Balance
	Units	Unit cost	Total cost	Units	Unit cost	Total cost	Units	Unit cost	Total cost
March. 1							84	15	1260
5				67	15	1005	17	15	255
11	93	17	1581				17	15	255
							93	17	1581
21				78	17	1326	17	15	255
							15	17	255

a. Cost of merchandise sold on March 21 =	1326
b. Inventory on March 31 = 255 + 255 =	510