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. Units 2,950 Unit Cost $ 50 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($199 each) c. Purchase, May 1 d. Sale, August 31 ($100 each) 62 2,750 (1,500) 1,250 (2,150) 89 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

1) Calculate cost of goods sold and ending inventory under LIFO perpetual method

	Goods purchased			Cost of goods sold			Ending inventory
Date	Quantity	Unit cost	Total cost	Quantity	Unit cost	Total cost	Quantity	Unit cost	Total cost
Jan 1							2050	50	102500
Jan 30	2750	62	170500				2050 2750	50 62	102500 170500
Mar 14				1500	62	93000	2050 1250	50 62	102500 77500
May 1	1250	80	100000				2050 1250 1250	50 62 80	102500 77500 100000
Aug 31				1250 900	80 62	100000 55800	2050 350	50 62	102500 21700
Balances						248800			124200

Cost of goods sold = $248800

Ending inventory = $124200