A company purchases inventory during the year in four batches, with unit and pri
ID: 2415080 • Letter: A
Question
A company purchases inventory during the year in four batches, with unit and price amounts shown below: Batch 1 – 9,500 units @ $2.10 per unit Batch 2 – 4,300 units @ $2.08 per unit Batch 3 – 3,600 units @ $2.04 per unit Batch 4 – 7,200 units @ $2.01 per unit 10,800 units were sold after Batch 2 was purchased, while 3,400 units were sold after Batch 3 was purchased. Required: -1. Calculate cost of goods sold and ending inventory under the LIFO method, using the perpetual inventory system. -2. Calculate cost of goods sold and ending inventory under the LIFO method, using the periodic inventory system.
Explanation / Answer
Batch 1 purchased – 9500* 2.10=$19950
Batch 2 purchased-4300*2.08= $8944
Total = $28894
Less: 10800 units sold
4300*2.08=$8944
6500*2.10=$13650
Total=$22594
Total Inventory left= $6300
Batch 3 purchased=3600*2.04=$7344
Total= $13644
Less: 3400*2.04=$6936
Inventory left= $6708
Batch 4 purchased=7200*2.01= 14472
Ending Inventory= $21180
(3000*2.10=6300)
(200*2.04=408)
(7200*2.01=14472)
Cost of Goods sold= 22594+6936= $29530
2. Periodic Inventory system
Batch 1 purchased – 9500* 2.10=$19950
Batch 2 purchased-4300*2.08= $8944
Batch 3 purchased=3600*2.04=$7344
Batch 4 purchased=7200*2.01= 14472
Total = $50710
Less : Sold
10800+3400=14200 units
7200*2.01=14472
3600*2.04=7344
3400*2.08= 7072
Total COGS= $28888
Closing inventory= $ 21822
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.