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Assume that we use a perpetual inventory system and that five identical units are purchased at...

Assume that we use a perpetual inventory system and that five identical units are purchased at the following four dates and costs:

April 5 $10
April 10 $12
April 15 $14
April 20 $16
April 22 $17

One unit is sold on April 25. The company uses the last-in, first-out (LIFO) inventory costing method.

Identify the cost of the ending inventory on the balance sheet.

Cost of the ending inventory:______________
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Answer #1

First We understand, LIFO:- LIFO is last in first out inventory system under which it is assumed that inventory purchased latest is sold first so, in the ending inventory consists of inventory purchased first.

So in that case ending inventory will be calculated as follows:

Per Units cost

No

Amount

Apr-05

$ 10

1

$ 10

Apr-10

$ 12

1

$ 12

Apr-15

$ 14

1

$ 14

Apr-20

$ 16

1

$ 16

Ending Inventory Value in balance sheet

$ 52
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