Mansfield Company has a periodic inventory system and uses the LIFO method to as
ID: 2422499 • Letter: M
Question
Mansfield Company has a periodic inventory system and uses the LIFO method to assign costs to inventory and cost of goods sold. Consider the following information:
Date
Description
# of units
Cost per unit
January 1
Beginning inventory
100
$5
October 2
Purchase
75
$4
December 5
Sales
125
What amounts would be reported as the cost of goods sold and ending inventory balances for the period?
Cost of goods sold $625; Ending inventory $175
Cost of goods sold $755; Ending inventory $225
Cost of goods sold $550; Ending inventory $250
Cost of goods sold $600; Ending inventory $200
Date
Description
# of units
Cost per unit
January 1
Beginning inventory
100
$5
October 2
Purchase
75
$4
December 5
Sales
125
Explanation / Answer
Answer :amounts would be reported as the cost of goods sold and ending inventory balances for the period is
Cost of goods sold $550; Ending inventory $250
Working notes for the above answer
Calculation for amounts would be reported as the cost of goods sold for the period is as follow
In LIFO method we record invetory as Last in First Ount (L.I.F.O.) so we record coost of goods sold as follow
December 5
Sales
125
So Cost of goods sold is 550
Calculation for amounts would be reported as the cost of goods sold and ending inventory balances for the period is as follow
As per LIFO method costs to inventory ois $ 250
c.Cost of goods sold $550; Ending inventory $250
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