I want to see if they are correct 1) A company had the following purchases and s
ID: 2517295 • Letter: I
Question
I want to see if they are correct
1) A company had the following purchases and sales during its first year of operations Purchases 10 units at $120 Sales anuary units units units units 13 units bruary:20 units at $125 15 units at $130 May tember: 12 units at $135 November: 10 units at $140 On December 31, there were 26 units remaining in ending inventory. Using the Perpetual LIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.) A) $3,405 B) $3,270 O $3,200 D) S3,364. E) S5,400. 2) A company had the following purchases and sales during its first year of operations: Purchases 10 units at $120 Sales 6 units units units units 13 units ruary: 20 units at $125 15 units at $130 September: 12 units at $135 ovember: 10 units at $140 On December 31, there were 26 units remaining in ending inventory. Using the Periodic LIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.) A) $3,405. B) $3,270. o $3,200. D) $3,364 E) $5,400.Explanation / Answer
Under the LIFO method of inventory valuation, the earliest purchases are sold first.
1.
Under Perpertual LIFO Sales units in the period consists of the earliest purchaeses of the period.
Units remained in ending inventory each month after sales are made :
In November, the sales of 13 units are made from 10 units purchased in November and 3 units from September.
Cost of ending inventory = (4 * 120) + (15 * 125) + (6 * 130) + (1 * 135)
= 480 + 1,875 + 780 + 135
= 3,270
2.
Under Periodic LIFO the Ending inventory of 26 units consists of 10 units from January purchases and 16 units from February purchases
Cost of ending Inventory = (10*120) + (16*125)
= 1,200 + 2,000
= 3,200
January 4 (10-6) February 15 (20-5) May 6 (15-9) September 1 (12-8-3)Related Questions
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