Question

QUESTION 3 

Eastview Company uses a periodic UFO Inventory system and has the following purchases and sales 

1 January 1 January 17 January 20 January 29 :50 units were purchased at 59 per unit. 20 unts were sold 1 6 units were purchased at $11 Det 50 units were sold 

What is the value of ending inventory?

Answer 1

Question 3

	Purchase	Sales	Balance	Rate	Amount
1-Jan	150
17-Jan		120	30	9	270
20-Jan	160		30	9	210
			160	11	1760
29-Jan		150	30	9	270
			10	11	110
					380

IN LIFO method, the last bought in units are to be sold first. For jan 29, the last bought is 160 units of 20^th Jan which needs to be sold first on Jan 29.

Hence, value of inventory as on 29 Jan = 380

Question 2 .

COGS to be computed for (10+20+15+12+10) - 26 = 41 units
	Quantity	Rate	Amount
Nov	10	140	1400
Sep	12	135	1620
May	15	130	1950
Feb	4	125	500
	41		5470

In periodic LIFO, there is no accounting period used. Rather all units total are made first and the COGS is computed as per the last rates till be quota units of COGS = 41 units are met

Hence. Correct option is C. $ 5470

Question 1

IN LIFO method, the last bought in units are to be sold first.

Looking at the data, only in November, 10 units has to be sold from Nov and balance 3 has to be sold from Sep purchases. The rates on balance months can be applied hitherto as:

COGS = 6 X 120 + 5 X 125 + 9 X 130 + 8 X 135 + 10 X 140 + 3X 135 = $5400

Hence, correct option is B.$ 5400.