Question

Balance of 100 180 CHAPTER 2 Number of Unit Price Units Transaction Units 100 Date $1.40 400 Jan. 1 Beginning balance 300 $1.55 320 Jan. 24 Purchased 80 Feb. 8 Issued 140 330 Mar. 16 Issued 150 $1.62 200 Jun. 11 Purchased 130 90 Aug. 18 Issued 110 Issued 240 Sep. 6 150 Purchased 100 Oct. 15 140 Dec. 29 Issued If a perpetual inventory record of Raw Material A is maintained on a LIFO basis, the September 0 80 units @ $1.55, 20 units @ $1.62 and 10 units @ $1.40. b. 110 units @ $1.55. c. 50 units @1.55 and 60 units @ 1.62. d. 20 units @ $1.62 and 90 units @ $1.55. mode when products are completed: $1.70

Answer 1

Ans.	Option A
	*Working Notes:
	LIFO:
	Purchase				Cost of goods sold (Issued)			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	01-Jan	100	$1.40	$140				100	$1.40	$140
	24-Jan	300	$1.55	$465				100	$1.40	$140
								300	$1.55	$465
	08-Feb				80	$1.55	$124	100	$1.40	$140
								220	$1.55	$341
	16-Mar				140	$1.55	$217	100	$1.40	$140
								80	$1.55	$124
	11-Jun	150	$1.62	$243				100	$1.40	$140
								80	$1.55	$124
								150	$1.62	$243
	18-Aug				130	$1.62	$211	100	$1.40	$140
								80	$1.55	$124
								20	$1.62	$32
	06-Sep				20	$1.62	$32
					80	$1.55	$124
					10	$1.40	$14	90	$1.40	$126
	15-Oct	150	$1.70	$255				90	$1.40	$126
								150	$1.70	$255
	29-Dec				140	$1.70	$238	90	$1.40	$126
								10	$1.70	$17
	Total				Cost of goods sold		$960	Ending inventory		$143
	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.
	Explanations: As shown in the above table that the cost of issued on 6th Setpember is calculated as follows:
	20 units @ $1.62, 80 units @ $1.55 and 10 units @ $1.40.