Return company had the following purchases and sales during its first year of op

Question

Return company had the following purchases and sales during its first year of operations: PurchasesS ales January: 10 units at $120 6 units February: 20 units at $125 5 units May: September: 12 units at $135 8 units November: 10 units at $140 13 units 15 units at $130 9 units n December 31, there were 26 units remaining in ending inventory Using the Perpetual LIFO inventory valuation method, what is the cost f the ending inventory? (Assume all sales were made on the last day of the month) Multiple Choice

Explanation / Answer

Answer:-Using the Perpetual LIFO inventory valuation method the cost ending inventory of 26 units is= $3270.

Explanation:-

Cost of closing inventory (LIFO method) Date Opening stock Purchases Sales Closing stock Units Rate per unit Amount Units Rate per unit Amount Units Rate per unit Amount Units Rate per unit Amount $ $ $ $ January 0 0 0 10 120 1200 6 120 720 4 120 480 Febuary 4 120 480 20 125 2500 5 125 625 4 120 480 15 125 1875 May 4 120 480 15 130 1950 9 130 1170 4 120 480 15 125 1875 15 125 1875 6 130 780 September 4 120 480 12 135 1620 8 135 1080 4 120 480 15 125 1875 15 125 1875 6 130 780 6 130 780 4 135 540 November 4 120 480 10 140 1400 10 140 1400 4 120 480 15 125 1875 3 135 405 15 125 1875 6 130 780 6 130 780 4 135 540 1 135 135 Total 26 3270

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