Question
In: Accounting
A company purchased 400 units for $50 each on January 31. It purchased 200 units for...
A company purchased 400 units for $50 each on January 31. It purchased 200 units for $25 each on Feb 28. It sold a total of 200 units for $60 each from March 1 through December 31. If the company uses the weighted - average inventory costing method, calculate the cost of ending inventory on December 31. (Assume that the company uses a perpetual inventory system. Round any intermediate calculations two decimal places and your final answer to the nearest dollar).
Solutions
Expert Solution
Solution:
Computation of closing inventory as per LIFO method
| Date | Purchase | Sales | Closing balance | ||||||
| unit | Price | total | unit | price | Total | unit | price | total | |
| January. 31 | 400 | 50 | 20000 | ||||||
| February. 28 | 200 | 25 | 10000 | ||||||
| Till Dec 31 | 200 | 60 | 12000 | 400 | 50 | 20000 |
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