Question

Altira Corporation uses a perpetual inventory system. The following transactions affected its merchandise inventory during the month of August 2018:

Aug.1	Inventory on hand—3,300 units; cost $7.40 each.
8	Purchased 16,500 units for $6.80 each.
14	Sold 13,200 units for $13.30 each.
18	Purchased 9,900 units for $6.20 each.
25	Sold 12,200 units for $12.30 each.
31	Inventory on hand—4,300 units.

Exercise 8-14 Part 2

2. Determine the inventory balance Altira would report in its August 31, 2018, balance sheet and the cost of goods sold it would report in its August 2018 income statement using the LIFO method. (Round "Cost per Unit" to 2 decimal places.)

Perpetual LIFO: Cost of Goods Available for Sale Cost of Goods Sold - August 14 Cost of Goods Sold - August 25 Inventory Balance # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beg. Inventory $0.00 $0 $0.00 $0 $0.00 Purchases: August 8 0.00 0.00 0.00 August 18 0.00 0 0.00 0.00 0 Total 0 $0 0 $0 0 $0 0 $0

Answer 1

• Answer is provided as asked, working is included in sheet if required.
• Amounts are in $
• LIFO method with Perpetual recording.
• Units are first sold from latest purchases, then earlier purchases.
• 13200 units sold first sold from Purchases on Aug 8
• 12200 units, first sold from latest purchases on Aug 18 (9900 units) , 2300 units from earlier purchases.

Perpetual LIFO:	Cost of Goods Available for Sale			Cost of Goods Sold - August 14			Cost of Goods Sold - August 25			Inventory Balance
	# of units	Cost per unit	Cost of Goods Available for Sale	# of units sold	Cost per unit	Cost of Goods Sold	# of units sold	Cost per unit	Cost of Goods Sold	# of units in ending inventory	Cost per unit	Ending Inventory
Beg. Inventory	3300	7.4	24420		0	0		0	0	3300	7.4	24420
Purchases:
Aug 8	16500	6.8	112200	13200	6.8	89760	2300	6.8	15640	1000	6.8	6800
Aug 18	9900	6.2	61380		0	0	9900	6.2	61380	0	0	0
Total	29700		$198000	13200		$89760	12200		$77020	4300		$31220

• Cost of Goods Sold = $89760 + $77020 = $166780
  
• Cost of Ending Inventory = $31220