Question

Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales for Item CZ83 are as follows:

January 1		Inventory	96 units @ $16
5		Sale	77 units
11		Purchase	107 units @ $20
21		Sale	90 units

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on January 21 and (b) the inventory on January 31.

a. Cost of merchandise sold on January 21	$
b. Inventory on January 31	$

Answer 1

a.	Cost of Merchandise sold on January 21	=	$            1,800
b.	Inventory on january 31		=	$                644
	Workings:
		Purchases			Cost of goods sold		Inventory on hand
	LIFO	Quantity	Cost per unit	Total cost	Quantity	Cost per unit	Total cost	Quantity	Cost per unit	Total cost
	Beginning Balance							96	$          16	$          1,536
	Jan-05				77	$              16	$         1,232	19	$          16	$              304
	Jan-11	107	$             20	$            2,140				19	$          16	$              304
								107	$          20	$          2,140
	Jan-21				90	$              20	$         1,800	19	$          16	$              304
								17	$          20	$              340
	Totals	107		$            2,140	167		$         3,032	36		$              644

If it is helpful, please rate the answer and if any doubt arises let me know