Question

Shown below is activity for one of the products of Denver Office Equipment: 

January 1 balance, 500 units @ $55 $27,500 

Purchases: 

January 10: 500 units @ $60 

January 20: 1,000 units @ $63 

Sales: 

January 12: 800 units 

January 28: 750 units 

Required: 

Compute the January 31 cost of ending inventory and cost of goods sold for January, assuming Denver uses LIFO and a periodic inventory system. 

Answer 1

• Ending Inventory = $ 24,750
• Cost of Goods Sold = $ 95,750

LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	500	$                55.00	$                      27,500.00	50	$               55.00	$                 2,750.00	450	$                 55.00	$          24,750.00
Purchases:
10-Jan	500	$                60.00	$                      30,000.00	500	$               60.00	$               30,000.00	0	$                 60.00	$                        -
20-Jan	1000	$                63.00	$                      63,000.00	1000	$               63.00	$               63,000.00	0	$                 63.00	$                         -
TOTAL	2000		$                    120,500.00	1550		$               95,750.00	450		$          24,750.00