Question

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the time of each sale, as if it uses a perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Transactions		Units			Unit Cost
Beginning inventory, January 1			1,300		$	50
Transactions during the year:
a.	Purchase, January 30		2,000			62
b.	Sale, March 14 ($100 each)		(1,350	)
c.	Purchase, May 1		1,100			80
d.	Sale, August 31 ($100 each)		(1,400	)

1. Calculate the cost of goods sold and ending inventory for Gladstone Company assuming it applies the LIFO cost method perpetually at the time of each sale.

Answer 1

Gladstone Company LIFO Perpetual Purchases Unit Cost Total Cost Cost of goods sold Units Unit Cost Total Cost Units Date Jan-01 Jan-30 2000 62 124000 Mar-14 1350 62 83700 Balance Unit Cost Total Cost 50 65000 50 65000 124000 65000 40300 65000 40300 88000 65000 21700 65000 21700 May-01 1100 80 Units 1300 1300 2000 1300 650 1300 650 1100 1300 350 1300 350 88000 Aug-31 1100 300 80 62 88000 18600 Dec-31 Purchases 212000 COGS 190300 Ending 86700