Question

The following are the transactions for the month of July. Units Unit Cost Unit Selling Price July 1 Beginning Inventory 53 $ 10 July 13 Purchase 265 13 July 25 Sold (100 ) $ 15 July 31 Ending Inventory 218 Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under LIFO. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places and your final answers to nearest whole dollar amount.)

Answer 1

Beginning inventory = 53 units * $ 10 = $ 530

Purchases = 265 units * $ 13 = $ 3,445

Sales = 100 units * $ 15 = $ 1,500

COST OF GOODS AVAILABLE FOR SALE

Beginning inventory + Purchases

= $ 530 + $ 3,445

cost of goods available       = $ 3,975

ENDING INVENTORY ( LIFO )

   from purchases 165 units and 53 units from beginning inventory

( $ 13 * 165 units ) + ( $ 10 * 53 )

Ending inventory = $ 2,285

Cost per unit , for 165 units it is $13 and for 53 units it is $ 10.

SALES ( 100 units * $ 15 ) = $ 1,500

Cost of goods sold

( 100 units * 13 ) = $ 1,300

----------------

Gross profit = $ 200

------------------