Question

Sandra’s Purse Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Sandra's Purse Boutique uses a periodic inventory system.

Date			Transactions	Units				Unit Cost				Total Cost
October	1		Beginning inventory		6			$	710				$	4,260
October	4		Sale		4
October	10		Purchase		5				720					3,600
October	13		Sale		3
October	20		Purchase		4				730					2,920
October	28		Sale		7
October	30		Purchase		7				740					5,180
													$	15,960

3. Using LIFO, calculate ending inventory and cost of goods sold at October 31.

What is ending inventory & cost of goods sold?

Answer 1

Solution

	Cost of Ending inventory	Cost of goods sold
LIFO	$                 5,700	$                 10,260

Working

LIFO
Total Units Avalable for sale		22
Units Sold		14
Closing Stock in Units		8
Valuation
Ending Inventory	6	@	$           710.00	$ 4,260
	2	@	$           720.00	$ 1,440
Value Of Ending Inventory				$              5,700
Cost of Goods sold(15960-5700)				$            10,260