Question

Salisbury Company uses the perpetual inventory system and had the following inventory & sales activity for the month of May 2019:

Date	Activity	Quantity	Unit Price
5/1	Beginning Inventory	175	$12.00
5/5	Purchase	200	$11.50
5/10	Sales	300	$25
5/15	Purchase	200	$12.50
5/20	Sales	250	$28
5/25	Purchase	150	$14.00

Using the LIFO method, determine the dollar value for Ending Inventory at the end of month of May. Round to the nearest cent.

Answer 1

Calculation of Ending inventory (under LIFO Method) Under Perpetual inventory System Purchase Quantity Unit price Cost of goods sold Quantity Unit price Total Total Particulars Beginning inventory (May 1) Ending inventory Quantity Unit price Total 175 $ 12.00 $2,100 1. First purchase ( May 5) 200 $ 11.50 $2,300 200 $ 175$ 11.50 12.00 $2,300 $2,100 $4,400 2. Sale ( May 10 ) 200S 75 S 12.00 $900 11.50 12.00 $2,300 $1,200 100 $ $900 3. Second purchase ( May 15 ) 200 $ 12.50 $2,500 200 $ 75 $ 12.50 12.00 $2,500 $900 $3,400 4. Sale ( May 20 ) 25$ 12.00 $300 200$ 50 $ 12.50 12.00 $2,500 $600 $300 5. Third purchase ( May 25 ) 150 $ 14.00 $2,100 150 $ 25$ 14.00 12.00 $2,100 $300 $2,400 $6,900 $6,600 $2,400 Ending Inventory for May is $ 2,400 Note : Actual sale value no need to consider for calculation of Ending inventory.