Question

Inventory information for Part 311 of Sunland Corp. discloses the following information for the month of June.

June   1		Balance		303 units @ $14		June 10		Sold		203 units @ $33
11		Purchased		796 units @ $17		15		Sold		499 units @ $35
20		Purchased		503 units @ $18		27		Sold		303 units @ $37

Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the value of the ending inventory at LIFO?

The ending inventory at LIFO $    Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the gross profit if the inventory is valued at FIFO? Gross Profit (FIFO) $

Answer 1

1) LIFO

	Goods Available for sale	Cost of goods sold	Ending Inventory
qty	rate	total	qty	rate	total	qty	rate	total
Jun 1	303	14	4242				303	14	4242
Jun 10				203	14	2842	100	14	1400
Jun 11	796	17	13532				100	14	1400
							796	17	13532
Jun 15				499	17	8483	100	14	1400
							297	17	5049
Jun 20	503	18	9054				100	14	1400
							297	17	5049
							503	18	9054
Jun 27				303	18	5454	100	14	1400
							297	17	5049
							200	18	3600
Total	1602		26828	1005		16779	597		10049

The Ending Inventory at LIFO is $10049

2) FIFO

	Goods Available for sale	Cost of goods sold	Ending Inventory
qty	rate	total	qty	rate	total	qty	rate	total
Jun 1	303	14	4242				303	14	4242
Jun 10				203	14	2842	100	14	1400
Jun 11	796	17	13532				100	14	1400
							796	17	13532
Jun 15				100	14	1400	397	17	6749
				399	17	6783
Jun 20	503	18	9054				397	17	6749
							503	18	9054
Jun 27				303	17	5151	94	17	1598
							503	18	9054
Total	1602		26828	1005		16176	597		10652

Total Sales

	Qty	Rate	Total
Jun 10	203	33	6699
Jun 15	499	35	17465
Jun 27	303	37	11211
Total Sales	1005		35375

Gross profit = Sales - Cost of goods sold

= 35375 - 16176

= $19199

Gross Profit (FIFO) is $19199.