LIFO Perpetual Inventory The beginning inventory of merchandise at Keats Office
ID: 2480157 • Letter: L
Question
LIFO Perpetual Inventory
The beginning inventory of merchandise at Keats Office Supplies and data on purchases and sales for a three-month period are as follows:
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. Under LIFO, if units are in inventory at two different costs, enter the units with the HIGHER unit cost first in the Cost of Merchandise Sold Unit Cost column and LOWER unit cost first in the Inventory Unit Cost column.
2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.
3. Determine the ending inventory cost as of May 31, 2016.
$
of Units Per Unit Total March 3 Inventory 36 $450 $16,200 8 Purchase 72 540 38,880 11 Sale 48 1,500 72,000 30 Sale 30 1,500 45,000 April 8 Purchase 60 600 36,000 10 Sale 36 1,500 54,000 19 Sale 18 1,500 27,000 28 Purchase 60 660 39,600 May 5 Sale 36 1,575 56,700 16 Sale 48 1,575 75,600 21 Purchase 108 720 77,760 28 Sale 54 1,575 85,050
Explanation / Answer
Keats Office Supplies Schedule of Merchandise Sold LIFO Method For the three Months ended May 31, 2014 Purchases Cost of Merchandise Sold Inventory Date Quantity Unit Cost Total Cost Quantity Unit cost Total Cost Quantity Unit cost Total Cost Mar. 3 36 $450 $16,200 Mar. 8 72 $540 $38,880 36 $450 $16,200 72 $540 $38,880 Mar. 11 48 $540 $25,920 36 $450 $16,200 24 $540 $12,960 Mar. 30 24 $540 $12,960 30 $450 $13,500 6 $450 $2,700 Apr. 8 60 $600 $36,000 30 $450 $13,500 60 $600 $36,000 Apr. 10 36 $600 $21,600 30 $450 $13,500 24 $600 $14,400 Apr. 19 18 $600 $10,800 30 $450 $13,500 6 $600 $3,600 Apr. 28 60 $660 $39,600 30 $450 $13,500 6 $600 $3,600 60 $660 $39,600 May. 5 36 $660 $23,760 30 $450 $13,500 6 $600 $3,600 24 $660 $15,840 May. 16 24 $660 $15,840 12 $450 $5,400 6 $600 $3,600 18 $450 $8,100 May. 21 108 720 77760 12 $450 $5,400 108 $720 $77,760 May. 28 54 $720 $38,880 12 $450 $5,400 54 $720 $38,880 May. 31 Balances 164160 $44,280 Total Sales $415,350 Totla Cost of Merchandise sold $164,160 Gross Profit From Sales $251,190 Ending Inventory Cost $44,280
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