Compute the ending inventory using LIFO for both the periodic and the perpetual

Question

Compute the ending inventory using LIFO for both the periodic and the perpetual methods below: units price 1-Jan Beginning inventory 3,500 $3.00 14-Jan Bought 1,500 $3.15 5-Feb Sold 1,000 22-Feb Bought 2,000 $3.20 7-Mar Sold 1,500 15-Mar Sold 2,000 5-Apr Bought 1,000 $3.25 10-Apr Sold 800 12-Apr Sold 800 22-Apr Sold 500 4-May Sold 600 10-May Bought 2,000 $3.30 25-May Sold 500 LIFO Periodic Inventory (scroll down to see Perpetual input area) Purchased Sold Balance Date units cost total units cost total units cost total 1-Jan 3500 $3.00 $10,500.00 LIFO Perpetual Inventory Purchased Sold Balance Date units cost total units cost total units cost total 1-Jan 3500 $3.00 $10,500.00

Explanation / Answer

Periodic Method : LIFO   Beginning Inventory 3500 Add : Purchases during the year 14-Jan 1500 22-Feb 2000 05-Apr 1000 10-May 2000 6500 Availabe units 10000 Less : Sales for the year 05-Feb 1000 07-Mar 1500 15-Mar 2000 10-Apr 800 12-Apr 800 22-Apr 500 04-May 600 25-May 500 7700 Ending Inventory 2300 The above 2300 units will be valued in LIFO Method :   2300 * 3 Answer = $ 6900 2 Perpetual Method : LIFO Date Purchases Sales Balance Jan-01 Beginning Inventory 3500 * 3 = 10500 Jan-14 1500*3 =4500 3500 * 3 = 10500 1500*3 =4500 Feb-05 1000 * 3 = 3000 3500 * 3 = 10500 500 * 3 = 1500 22-Feb 2000 * 3.20 = 6400 3500 * 3 = 10500 500 * 3 = 1500 2000 * 3.20 = 6400 07-Mar 1500 * 3.20 = 4800 3500 * 3 = 10500 500 * 3 = 1500 500 * 3.20= 1600 15-Mar 500 * 3.20= 1600 2500 * 3 = 7500 1500 * 3 = 4500 05-Apr 1000*3.25 = 3250 2500 * 3 = 7500 1000*3.25 = 3250 10-Apr 800 * 3.25 = 2600 2500 * 3 = 7500 200*3.25 = 650 12-Apr 200*3.25 = 650 1900 * 3 =5700 600* 3 = 1800 22-Apr 500 * 3 = 1500 1400 * 3 =4200 04-May 600 * 3 = 1800 800 * 3 =2400 10-May 2000 * 3.30 =6600 800 * 3 =2400 2000 * 3.30 =6600 25-May 500 * 3.30 = 1650 800 * 3 =2400 1500 * 3.30 =4950 Total 7350

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