Question

Requirement 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Inventory on Hand Purchases Cost of Goods Sold Unit Unit Total Total Unit Total Cost Quantity Cost Date Quantity Cost Cost Cost Quantity Cost May 1 11 i More Info 28 tires @ $ 70 each May 1 Beginning merchandise inventory 26 7 tires@ $ 11 Purchase 80 each 14 tires@ $ 23 Sale 88 each 21 tires @ $ 82 each 26 Purchase 25 tires @ $ 29 Sale 88 each Totals Print Done Compute gross profit using the LIFO inventory costing method. usina the LIEO inventorv costina method. Gross profit is $ 23 29

Answer 1

Perpetual LIFO Ending Inventory Unit Cost Total Cost Goods Purchased Cost of Goods sold Unit Cost Total Cost Unit Cost Total Cost units Date units units May-01 May-11 28 70 1960 28 560 70 7 80 1960 7 80 560 May-23 7 80 560 21 70 1470 490 7 70 0 0 0 May-26 1722 1470 21 82 21 70 1722 21 82 1190 May-29 21 82 1722 17 70 280 4 70 Total 2282 3052 1190 28 39 17 Sales 3432 Less: Cost of goods sold 3052 Gross profit 380