Question

4 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 points Unit Cost $50 Skipped Transactions Beginning inventory. January 1 Transactions during the year! a. Purchase, January 30 b. Sale, March 14 ($100 each) c. Purchase, May 1 d. Sale, August 31 ($100 each) Units 2,250 2.950 (1,540) 1.290 (2,350) 62 90 eBook 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. Cost of Goods Sold Ending Inventory

Answer 1

LIFO COST METHOD
		PURHASES			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
Jan, 01	Beginning inventory							2250	$         50.00	$1,12,500
January , 30	Purhcases	2950	$             62.00	$1,82,900				2250	$         50.00	$1,12,500
								2950	$         62.00	$1,82,900
Mar, 14	Sales				1540	$             62.00	$95,480	2250	$         50.00	$1,12,500
								1410	$         62.00	$87,420
May, 01	Purhcases	1290	$             80.00	$1,03,200				2250	$         50.00	$1,12,500
								1410	$         62.00	$87,420
								1290	$         80.00	$1,03,200
Aug, 31	Sales				1290	$             80.00	$1,03,200
					1060	$             62.00	$65,720	2250	$         50.00	$1,12,500
								350	$         62.00	$21,700
		4,240		$2,86,100	3,890		$2,64,400	2600		$1,34,200
	ANSWERS:
	Cost of Goods Sold	$2,64,400
	Ending inventory	$1,34,200