Question

eBook Show Me How Calculator Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales for Item 88 HX are as follows: WIU July 1 Inventory 90 units at $52 8 Sale 75 units 15 Purchase 125 units at $58 27 Sale 100 units Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of goods sold on July 27 and (b) the inventory on July 31. a. Cost of goods sold on July 27 b. Inventory on July 31

Answer 1

Ans. A	Cost of goods sold on July 27    =    $5,800
Ans. B	Inventory on July 31                    =     $2,230
	*Working Notes:
	PERPETUAL LIFO:
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	01-Jul	90	$52.00	$4,680				90	$52.00	$4,680
	08-Jul				75	$52.00	$3,900	15	$52.00	$780
	15-Jul	125	$58.00	$7,250				15	$52.00	$780
								125	$58.00	$7,250
	27-Jul				100	$58.00	$5,800	15	$52.00	$780
								25	$58.00	$1,450
	Total				Cost of goods sold		$9,700	Ending inventory		$2,230
	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.