The Mann Corporation began operations in 2011. Information relating to the compa

Question

The Mann Corporation began operations in 2011. Information relating to the company’s purchases of inventory and sales of products for 2011 and 2012 is presented below. Calculate the Cost of Goods Sold and Ending Inventory under LIFO Perpetual for both years. Be sure to include 2011 ending inventory into 2012 calculation Remember that the selling cost has no impact on your calculations 2011 Units Cost Total Cost of Inventory 1-Jan Purchase 200 $10 $2,000 1-Apr Sold 120 $25 1-Jul Purchase 100 $14 $1,400 1-Sep Sold 130 $25 2012 1-Jan Beginning Inventory 1-Jan Purchase 100 $16 $1,600 1-Apr Sold 80 $30 1-Jul Purchase 100 $18 $1,800 1-Sep Sold 100 $35 2011 2012 Cost of goods sold Cost of goods sold Ending inventory Ending inventory The Mann Corporation began operations in 2011. Information relating to the company’s purchases of inventory and sales of products for 2011 and 2012 is presented below. Calculate the Cost of Goods Sold and Ending Inventory under LIFO Perpetual for both years. Be sure to include 2011 ending inventory into 2012 calculation Remember that the selling cost has no impact on your calculations 2011 Units Cost Total Cost of Inventory 1-Jan Purchase 200 $10 $2,000 1-Apr Sold 120 $25 1-Jul Purchase 100 $14 $1,400 1-Sep Sold 130 $25 2012 1-Jan Beginning Inventory 1-Jan Purchase 100 $16 $1,600 1-Apr Sold 80 $30 1-Jul Purchase 100 $18 $1,800 1-Sep Sold 100 $35 2011 2012 Cost of goods sold Cost of goods sold Ending inventory Ending inventory

Explanation / Answer

Answer:

Calculations for 2011:

80 units*$10 = $800

100 units*$14 = $1400

100 units*$14 = $1400

30 units* $10 = $300

Total130 units = $1700

Cost of goods sold (250 units) = 1700+1200 = $2900

Ending inventory( 50 units) = $500

Calculation for 2012:

Ending inventory in 2011 will be beginning inventory in 2012.Therefore, 2012 has 50 units in beginning.

50 units*$10 = $500

100 units*$16 = $1600

50 units*$10 = $500

(100-80 = 20) units*$16 = $320

50 units*$10 = $500

20 units*$16 = $320

100 units*$18 = $1800

100 units*$18 = $1800

50 units*$10 = $500

20 units*$16 = $320

Cost of goods sold (180 units) =1800+1280 = $3080

Ending inventory (50+20 = 70 units) = $320+$500 = $820

Date Purchases Cost of sales Balance 1-Jan 200 units*$10 = $2000 200 units*$10 = $2000 1-Apr 120 units *$10 = $1200 (200-120 = 80) units*$10 = $800 1-Jul 100 units*$14= $1400

80 units*$10 = $800

100 units*$14 = $1400

1-Sep

100 units*$14 = $1400

30 units* $10 = $300

Total130 units = $1700

(80-30=50) units*$10 = $500

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