Question

A company had inventory on November 1 of 5 units at a cost of $24 each. On November 2, they purchased 14 units at $26 each. On November 6 they purchased 10 units at $29 each. On November 8, 11 units were sold for $59 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale

Answer 1

The value of the inventory is 458

Step-by-step explanation:

First we need to calculate the inventory value before the sale.

24*5=120

26*14=364

29*10=290

290+364+120=774

The inventory valuation is $774 before the sale.

Now using the LIFO method we will use the units bought last as cost of goods sold so

10*29=290

1*26=26

11 units for 290+26=316

Ending Inventory value = Starting inventory value - cost of goods sold

So the cost of goods sold are 316, now we will subtract 316 from 774

774-316=458

The value of the inventory is 458