Question

In: Accounting

Windsor, Inc. has the following inventory data: July 1 Beginning inventory 26 units at $5.20 5...

Windsor, Inc. has the following inventory data:

July 1 Beginning inventory 26 units at $5.20
5 Purchases 103 units at $5.70
14 Sale 69 units
21 Purchases 52 units at $6.20
30 Sale 48 units


Assuming that a perpetual inventory system is used, what is the value of ending inventory on a LIFO basis for July?

Solutions

Expert Solution

LIFO Perpetual Inventory Card for the month of July
Date Purchase Sale Balance
Jul-01 Beggining Inventory ( 26 units X $ 5.20 ) $ 135.20
Jul-05 ( 103 units X $ 5.70 ) $ 587.10 - - ( 26 units X $ 5.20 ) $ 135.20
( 103 units X $ 5.70 ) $ 587.10
Jul-14 - - ( 69 units X $ 5.70 ) $ 393.30 ( 26 units X $ 5.20 ) $ 135.20
( 34 units X $ 5.70 ) $ 193.80
Jul-21 ( 52 units X $ 6.20 ) $ 322.40 - - ( 26 units X $ 5.20 ) $ 135.20
( 34 units X $ 5.70 ) $ 193.80
( 52 units X $ 6.20 ) $ 322.40
Jul-30 - - ( 48 units X $ 6.20 ) $ 297.60 ( 26 units X $ 5.20 ) $ 135.20
( 34 units X $ 5.70 ) $ 193.80
( 4 units X $ 6.20 ) $    24.80
Total $ 909.50 $ 690.90 $ 353.80
Therefore, Value of ending Inventory on a LIFO basis for July is $ 353.80.
In Last In Last Out ( LIFO ) method of Inventory valuation assumes that the last cost incurred to purchase merchandise or the direct materials are the first costs charged against revenues.

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