Question

July 1 Beginning inventory 54 units at $122 5 Purchases 306 units at $114 14 Sale 204 units 21 Purchases 153 units at $117 30 Sale 143 units Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis?

Answer 1

$19,356

Step-by-step explanation:

July

1 Beg. Inventory 54 $122

5 Purchases 306 $114

14 Sale 204

21 Purchases 153 $117

31 Sale 143

Number of units left = (54+306-204+153-143)= 166

On LIFO(Last-in, first-out) basis, these 166 units of ending inventory cost;

= (54*122) + (166-54)*114 (Note:166-54 is to find the balance after the first 54)

= $6,588 + $12,768

= $19,356