Question

The following lots of a particular commodity were available for sale during the year Beginning inventory 10 units at $52.00 First purchase 19 units at $50.00 Second purchase 55 units at $59.00 Third purchase 14 units at $63.00 The firm uses the periodic system, and there are 27 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the LIFO method? Select the correct answer.

Answer 1

Ending Inventory $1,523

COGS $4,227

Step-by-step explanation:

PURCHASES

DATE QUANTY PRICE SUBTOTAL

Beginning 10 $52 $520.00

1st 19 $50 $950.00

2nd 55 $59 $3,245.00

3rd 14 $63 $882.00

Because we sold at LIFO we record the latest units as COGS and the first untis at ending invenotry.

So we start from the first line until reach the 27 units

27 - 10 beginning = 17

we are short, so we move to next line

19 - 17 = 2 with this unit we cover the ending inventory, the diference is part of COGS and all the lines below are also COGS

COGS

2 units at $50

55 units at $59

14 units at $63

Total 4,227

Ending Inventory

10 units at $52

17 units at $59

Total $1,523