Question

Calculator Print Item Boxwood Company sells blankets for $30 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Date Blankets Units Cost May 03 Purchase $15 10 Sale 17 Purchase 20 Sale 23 Sale 30 Purchase 12 $19 Assuming that the company uses the perpetual Inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method. Ca. $328 b. $164 CC 5243 d. $413

Answer 1

LIFO Method: LIFO stands for Last In First Out which means that cost of goods sold must consider cost of those goods recently. As a result, ending inventory will contain cost of initial purchases or beginning inventory. Under perpetual method, inventory records are updated continously. Purchases Rate $15.00 Cost of Goods Sold Rate Amount Units Amount Units Ending Inventory Units Rate Amount $15.00 May 3 $75 $75 4 $15.00 $60 1 $15.00 $15 May 10 May 17 12 $17.00 $204 $15.00 $17.00 $15 $204 $219 May 20 $17.00 $68 $15.00 $17.00 $15 $136 $151 $15 $85 $100 May 23 3 $17.00 $51 $15.00 $17.00 May 30 12 $19.00 $228 11 $15.00 $15 $17.00 $85 $19.00 $228 $328 --> Option-(a) (Ending Inventory) 18 $179 (Cost of Goods Sold)