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Cost layers for perpetual system is given, how to calculate cost of goods sold, ending inventory...

Cost layers for perpetual system is given, how to calculate cost of goods sold, ending inventory under LIFO, FIFO, and Average cost

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Expert Solution

Under LIFO Method.

> Cost of goods sold = Units sold* purchase cost( here last purchase units are sold first)

> Ending inventory = Unit of closing stock * Purchase cost ( here first purchases are taken for valuation of closing stock.

Under FIFO Method.

> Cost of goods sold = Units sold* purchase cost( here first purchase units are sold first)

> Ending inventory = Unit of closing stock * Purchase cost ( here last purchases are taken for valuation of closing stock.

ekkarill92 answered 2 years ago
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