In: Accounting
Required information [The following information applies to the questions displayed below.] Jimmie’s Fishing Hole has the following transactions related to its top-selling Shimano fishing reel for the month of June. Jimmie’s Fishing Hole uses a periodic inventory system. Date Transactions Units Unit Cost Total Cost June 1 Beginning inventory 16 $ 290 $ 4,640 June 7 Sale 11 June 12 Purchase 10 280 2,800 June 15 Sale 12 June 24 Purchase 10 270 2,700 June 27 Sale 8 June 29 Purchase 9 260 2,340 $ 12,480 3. Using LIFO, calculate ending inventory and cost of goods sold at June 30.
Ans. | Total units sold (11 + 12 + 8) = 31 units | ||||||||||
LIFO: | Cost of goods available for sale | Cost of goods sold - Periodic LIFO | Ending inventory - Periodic LIFO | ||||||||
Units | Rate | Total | Units | Rate | Total | Units | Rate | Total | |||
Beginning inventory | 16 | $290.00 | $4,640 | 2 | $290.00 | $580 | 14 | $290.00 | $4,060 | ||
Purchases: | |||||||||||
12-Jun | 10 | $280.00 | $2,800 | 10 | $280.00 | $2,800 | 0 | $280.00 | $0 | ||
24-Jun | 10 | $270.00 | $2,700 | 10 | $270.00 | $2,700 | $270.00 | ||||
29-Jun | 9 | $260.00 | $2,340 | 9 | $260.00 | $2,340 | 0 | $260.00 | $0 | ||
Total | 45 | $12,480 | 31 | $8,420 | 14 | $4,060 | |||||
*In LIFO method the units that have purchased last, are released the first one and ending inventory units | |||||||||||
remain from the first purchase. | |||||||||||