Using the LIFO perpetual inventory method, the ending inventory on December 31st would be comprised of 300 units at $9.50 each and 50 units at $9.00 each, totaling $3,300. However, this total does not match any of the answer options given (A. $3,600, B. $3,650, C. $9,250, D. $8,900), suggesting a possible mistake in the provided options or the calculations.
To determine the cost of ending inventory at December 31st using the LIFO (Last-In, First-Out) perpetual method, we must consider the most recent purchases first for the cost of goods sold (COGS).
We start by calculating how many units were left after each sale and then assign costs to the ending inventory based on the remaining inventory costs.
Calculations
Starting Inventory: 450 units at $9.00 each
October 2 Purchase: 300 units at $9.50 each
October 30 Sale: 400 units sold
November 20 Purchase: 600 units at $10.00 each
December 2 Sale: 550 units sold
After the October 30 sale of 400 units, we have 350 units left (450 starting + 300 purchased - 400 sold). The 350 units are composed of 300 units at $9.50 each and 50 units at $9.00 each.
After the December 2 sale of 550 units, we subtract from the most recent purchases, the November 20 purchase of 600 units at $10.00 each.
This leaves 400 units unsold (600 - 550), but since we sold units from the most recent purchase first (LIFO), we take the remaining units from the October 2 purchase and the starting inventory.
This means we have 300 units at $9.50 each and 50 units at $9.00 each left in ending inventory.
Therefore, the ending inventory cost is calculated as:
300 units x $9.50 = $2,850
50 units x $9.00 = $450
Total Ending Inventory = $2,850 + $450 = $3,300
However, none of the options presented (A. $3,600, B. $3,650, C. $9,250, D. $8,900) matches the calculated ending inventory cost of $3,300.
It appears there might be a mistake in the options provided or in the calculations performed.
Please double-check the options or provide additional information.