Question

QS 6-5 Perpetual: Inventory costing with LIFO LO P1 

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 280 units. Ending inventory at January 31 totals 130 units. 

	Units	Unit Cost
Beginning inventory on January 1	250	$ 2.30
Purchase on January 9	60	2.50
Purchase on January 25	100	2.64

   

Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on LIFO. 

Answer 1

Solution

	GOODS PURCHASED		COST OF GOODS SOLD			INVENTORY BALANCE
DATE	# OF UNITS	COST PER UNIT	# OF UNITS SOLD	COST PER UNIT	COST OF GOODS SOLD	# OF UNITS	COST PER UNIT	INVENTORY BALANCE
Jan-01						250	2.3	575
Jan-09	60	$        2.50				250	$        2.30	$    575.00
						60	$        2.50	$    150.00
								$    725.00
Jan-25	100	$        2.64				250	$        2.30	$    575.00
						60	$        2.50	$    150.00
						100	$        2.64	$    264.00
								$    989.00
Jan-26			100	$        2.64	$    264.00	130	$        2.30	$    299.00
			60	$        2.50	$    150.00
			120	$        2.30	$    276.00
TOTAL					$ 690.00			$ 299.00