Question

Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers:

Date	Transaction	Number of Units				Cost per Unit
1/1	Beginning Inventory		160			$	860
5/5	Purchase		260			$	960
8/10	Purchase		360			$	1,060
10/15	Purchase		230			$	1,110

During the year, Lauer sold 900 laptop computers.
What was cost of goods sold using the LIFO cost flow assumption?

Answer 1

Date	Transaction	Number of Units	Cost per Unit	Total Cost
01-Jan	Beginning Inventory	160	860	137,600
05-May	Purchase	260	960	249,600
08-Oct	Purchase	360	1,060	381,600
Oct-15	Purchase	230	1,110	255,300
Oct-15	Total	1010		1,024,100

Number of units sold = 900

Number of units available for sale = 1,010

Ending inventory units =  Number of units available for sale - Number of units sold

= 1,010-900

= 110

Calculation of Ending inventory
Date	Units	Unit Cost	Total Cost
1/11	110	860	94,600

Cost of goods sold = Cost of goods available for sale - Cost of ending inventory

= 1,024,100-94,600

= $929,500

cost of goods sold using the LIFO cost flow assumption is = $929,500

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