Question

Bufford Appliance uses a perpetual inventory system. For its flat-screen television sets, the January 1 inventory was 3 sets at $650 each. On January 10, Bufford purchased 7 units at $670 each. The company sold 2 units on January 8 and 4 units on January 15.

Compute the ending inventory under LIFO

$

Answer 1

LIFO under perputal System
Date	Purchases	Sale	Balance
1-Jan	Beginning Inventory		3 sets *$ 650= $ 1950
8-Jan		2 sets *$ 650= $ 1300	1 set *$ 650= $ 650
10-Jan	7 sets *$ 670= $4690		1 set *$ 650= $ 650
			7 sets *$ 670= $4690
15-Jan		4 sets *$ 670= $ 2680	1 set *$ 650= $ 650
			3 sets *$ 670= $ 2010

Ending Inventory	$ 650+$ 2010
	2660

Explanation:
1	Under LIFO method of inventory units that was purchased last will be sold first.
2	Sale on 8 jan will be done from the opening balance.