Question

Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales for Item HM46 are as follows:

July 1		Inventory	104 units @ $32
5		Sale	83 units
11		Purchase	115 units @ $35
21		Sale	97 units

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on July 21 and (b) the inventory on July 31.

a. Cost of merchandise sold on July 21	$
b. Inventory on July 31	$

Answer 1

Solution

a. Cost of merchandise sold on July 21	$ 3,332
b. Inventory on July 31	$ 1,365

Working

	Purchases			Sales			Balance
	Units	Rate	Amount	Units	Rate	Amount	Units	Rate	Amount
01-Jul							104	$ 32.00	$    3,328.00
05-Jul				83	$             32.00	$    2,656.00	21	$ 32.00	$        672.00
11-Jul	115	$               35.00	$          4,025.00				21	$ 32.00	$        672.00
							115	$ 35.00	$    4,025.00
21-Jul				21	$             32.00	$       672.00
				76	$             35.00	$    2,660.00	39	$ 35.00	$    1,365.00
Total	115		4025	180		$    5,988.00	39		$    1,365.00