Question

apter 7 - Homework Assignment Help Saw Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the time of each sale, as if it uses a perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Ints Units 1,450 Unit Cost $50 Skipped Transactions Beginning inventory, January ary Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($100 each) C. Purchase, May 1 Sale, August 31 ($100 each) 62 2,150 (1,380) 1.130 (1,550) book 1. Calculate the cost of goods sold and ending inventory for Gladstone Company assuming it applies the LIFO cost method perpetually at the time of each sale. Cost of Goods Sold Ending Inwentary < Prev 4 of 5 !!! Next > pe here to search

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Answer 1

Cost of goods sold and ending inventory under LIFO cost method (perpetual inventory system)

Dade ranucton unito unit Cat Amnty ak habne atgth nld Eegining ineny M50 Puichoz Jan Jan 30 50 500 a05,800 150 I13 80) 100 Sale 5,560 20,MD 60 94000 9400 May Fonchone 30 130 May 1550) 100 16400
january 1

inventory account balance 1450×$50=$72,500

January 30

Inventory account balance $72,500+ 2150×$62=$205,800

march 14

Cost of goods sold 1,380×$62=$85,560

Inventory account balance $205,800-$85,560= $120,240

may 1

inventory account balance $120,240+ 1,130×$80= $210,640

August 31

Cost of goods sold 1,130×$80= $90,400 + 420×$62=$26,040 = $116,400

Inventory account balance $210,640-$116,400= $94,200

December 31

As of December 31 ending inventory is $94,200 (350×$62 + 1,450×$50) and cost of goods sold is $201,960.

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