Question

FFS Clothing Store sells socks. During January 2017, its inventory records for one particular brand of socks were as follows:

Quantity Price per pair Total

Beginning Inventory 16 pairs $18 = $288

January 6 Purchase 13 pairs $16 = $208

January 10 Sale 15 pairs N/A

January 15 Purchase 18 pairs $15 = $270

January 20 Sale 22 pairs N/A

January 25 Purchase 14 pairs $22 = $308

See information for FFS Clothing Store above. Using this information, perpetual LIFO remaining inventory is

Select one: a. $371 b. $488 c. $586 d. None of these

Answer 1

b. $488

Working:

a.		Purchase				Sales				Inventory in hand
Date		Quantity	Price per pair	Total		Quantity	Price per pair	Total		Quantity	Price per pair	Total
	Beginning Inventory									16	$                   18	$        288
6-Jan	Purchase	13	$                   16	$                208						16	$                   18	$        288
										13	$                   16	$        208
10-Jan	Sale					13	$                   16	$        208
						2	$                   18	$          36		14	$                   18	$        252
15-Jan	Purchase	18	$                   15	$                270						14	$                   18	$        252
										18	$                   15	$        270
20-Jan						18	$                   15	$        270
						4	$                   18	$          72		10	$                   18	$        180
25-Jan		14	$                   22	$                308						10	$                   18	$        180
										14	$                   22	$        308
b.
	Inventory at the end of period:
			Quantity	Price per pair	Total
			10	$                   18	$        180
			14	$                   22	$        308
			24		$        488
Under perpetual inventoy method, inventory records are updated as and when transaction takes place.
Further, LIFO stands for last in first out.It means inventory which are bought in last will be recorded as sold first.