A company had the following purchases and sales during its first year of operati

Question

A company had the following purchases and sales during its first year of operations 12 Purchases Sales January 21 units at $195 15 units February: 31 units at $200 18 units May September: 23 units at $210 21 units Novenber: 21 units at $215 22 unitS 26 units at $205 22 units 000121 On December 31, there were 24 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) Multiple Choice $10.389. $9,951 2 3 5 6 8 9

Explanation / Answer

Answer 12

Calculation of Ending inventory value as per LIFO (Perpectual method) :

Therefore required value of inventory = $4,800 (option b)

Answer 13

Cost of Goods Sold (COGS) as per weighted Average Methof (Perpetual method)

Avg Cost per unit = 16 units *$7 + 21units * $9 / 16 units + 21 units = $8.14 per unit

COGS = 18 units * $8.14 = $146.52 (option a)

Answer 14

Calculation of COGS as per FIFO (Perpectual method) :

Reqired COGS = $206 (option b )

Answer 15

Calculation of Ending inventory as per FIFO (Perpectual method) :

Reqired value in Inventory = $60 ( must be option d )

Answer 16

COGS as per LIFO = 10 units *$18 + 2 units * $16 = $212 (option a)

Month Units lefts in invetory Total value ($) Jan 6 units 6 units *195 = 1,170 Feb 13 units 13 units * 200 = 2,600 May 4 units 4*205 = 820 Sept 1 unit 1 unit * 210 = 210 Inventory Value 4,800

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