Question

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 300 units. Ending inventory at January 31 totals 130 units.

	Units	Unit Cost
Beginning inventory on January 1	270	$	2.50
Purchase on January 9	60		2.70
Purchase on January 25	100		2.84

Required:
Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on LIFO.
$88973730_1064669617239760_92188864374353$

Answer 1

Ans.
	LIFO:
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	01-Jan	270	$2.50	$675				270	$2.50	$675
	09-Jan	60	$2.70	$162				270	$2.50	$675
								60	$2.70	$162
	25-Jan	100	$2.84	$284				270	$2.50	$675
								60	$2.70	$162
								100	$2.84	$284
	26-Jan				100	$2.84	$284
					60	$2.70	$162
					140	$2.50	$350	130	$2.50	$325
	Total				Cost of goods sold		$446	Ending inventory		$325
	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.