Question

Headland Company is a multiproduct firm that uses the perpetual inventory system. Presented below is information concerning one of its products, the Hawkeye.

Date		Transaction		Quantity		Price/Cost
Jan. 1		Beginning inventory		960		$14
Feb. 4		Purchase		1,920		20
Feb. 20		Sale		2,400		36
Apr. 2		Purchase		2,880		25
May 4		Sale		2,112		39

Compute cost of goods sold under LIFO.

Cost of goods sold		$
Ending inventory		$

Answer 1

A)Compute cost of goods sold under LIFO

Date	Particular	Purchase	Sales	Balance
		Units	Rate	Amount	Units	Rate	Amount	Units	Rate	Amount
1-Jan	Beginning	0	0	0	0	0	0	960	$14	$13,440
4-Feb	Purchase	1920	$20	$38,400				960	$14	$13,440
								1920	$20	$38,400
20-Feb	Sale				1920	$20	$38400
					480	$14	$6720	480	$14	$6720
2-Apr	Purchase	2880	$25	$72,000				480	$14	$6720
								2880	$25	$72,000
5-May	Sale				2112	$25	$52800	480	$14	$6720
								768	$25	$19200

B)Cost of goods sold

= 1920 * $20 = $38400

= 480 * $14 = $6720

= 2112 * $25 = $52800

38400+6720+52,800 = $97920

That is cost of goods sold is $97,920

C) ENDING INVENTORY

= 480 * $14 = $6720

= 768 * $25 = 19,200

6720+19200=25,920