Question

B. The beginning inventory amount D. Equal to the cost of goods purchased 31. A company that uses a perpetual inventory syste beginning inventory. a perpetual inventory system made the following cash purchases and sales. There was no January 1: Purchased 100 units at $10 per unit. February 5: Purchased 60 units at $12 per unit. March 16: Sold 40 Units for $16 per unit Prepare the general journal entries to record the March 16 sale using the LIFO inventory valuation method. Mar 16 Cash ($16 x 40). Sales Mar. 16 Cost of goods sold ($12 x 40). Merchandise inventory 640 640 480 480 *32. A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows: January 1: Beginning balance of 18 units at $13 each. January 12: Purchased 30 units at $14 each. January 19: Sold 24 units at $30 selling price each. January 20: Purchased 24 units at $17 each. January 27: Sold 27 units at $30 selling price each Required: Using the LIFO method of valuation, determine the cost of sales and value of the ending inventory.

Answer 1

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Answer 31
In perpetual LIFO method inventory purchased last will be sole first.
60 units are purchased on February 5 and then 40 units are sold on March 16.
So Sales value will be-
40 units * $ 16 =		640.00
And cost of goods sold value will be-
40 units * $ 12 =		480.00
Journal Entry for sales
Date	Account	Debit $	Credit $
16-Mar	Cash	640.00
	Sales		640.00
16-Mar	Cost of goods sold	480.00
	Merchandise inventory		480.00
Answer 32
Perpetual LIFO
Date	Cost of Goods available for sale			Cost of sales			Ending Inventory
	No. of Units	Cost per unit	Amount	No. of Units	Cost per unit	Cost of Goods sold	No. of Units	Cost per unit	Inventory Balance
1-Jan	18.00	13.00	234.00				18.00	13.00	234.00
12-Jan	30.00	14.00	420.00				18.00	13.00	234.00
							30.00	14.00	420.00
19-Jan				24.00	14.00	336.00	18.00	13.00	234.00
							6.00	14.00	84.00
20-Jan	24.00	17.00	408.00				18.00	13.00	234.00
							6.00	14.00	84.00
							24.00	17.00	408.00
27-Jan				24.00	17.00	408.00	18.00	13.00	234.00
				3.00	14.00	42.00	3.00	14.00	42.00
Ending Inventory				51.00		786.00	21.00		276.00
So cost of sales is $ 786.
Ending Inventory balance is $ 276.