Question

given the following information, determine the cost of goods sold using lifo if there are only 136 units left. number of units cost per unit total cost beginning inventory 80 $1.20 $ 96 january 10 purchase 100 1.15 115 january 16 purchase 100 1.23 123 january 29 purchase 120 1.25 150 goods available for sale 400 $484 multiple choice question. $314.32 $319.44 $323.60

Answer 1

The cost of goods sold (COGS) using the LIFO method with 136 units left is $323.60.

Step-by-step explanation:

To determine the cost of goods sold (COGS) using the Last-In, First-Out (LIFO) method when there are only 136 units left, we need to start by calculating the cost of the units sold. We will begin by subtracting the remaining inventory from the total goods available for sale to find the number of units sold. In this case, 400 units available minus 136 units remaining equal 264 units sold. Using LIFO, we will start with the cost of the most recently purchased items first and work our way back.

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• January 29 purchase: 120 units at $1.25 each = $150
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• January 16 purchase: 100 units at $1.23 each = $123
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• January 10 purchase: Remaining 44 units at $1.15 each = $50.60

Now we add up these amounts to find the COGS: $150 (from Jan 29) + $123 (from Jan 16) + $50.60 (from Jan 10) = $323.60 as the COGS using LIFO.

Answer 2

The cost of goods sold using the LIFO method would be $314.32. This figure is obtained by subtracting the value of the remaining inventory from the total value of goods available for sale, taking into account that the last items purchased are the first ones to be sold.

Step-by-step explanation:

To determine the cost of goods sold (COGS) using the Last-In, First-Out (LIFO) method, we must assume that the last units purchased are the first ones sold. Since there are 136 units remaining, we need to first find out which purchases are included in the ending inventory. We start with the most recent purchases and work backwards until we have accounted for all 136 units.

• January 29 purchase: 120 units $1.25 each = $150

• January 16 purchase: 16 units (out of 100) $1.23 each = $19.68

The remaining 136 units consist of the full January 29 purchase and 16 units from the January 16 purchase. This totals 136 units and the rest are assumed to have been sold.

Now, we calculate the cost of goods that would have been sold using the LIFO method:

• 100 units from January 16 purchase (not included in ending inventory) $1.23 each = $123

• 100 units from January 10 purchase $1.15 each = $115

• 80 units from Beginning Inventory $1.20 each = $96

• 16 units from January 16 purchase (included in ending inventory) subtracted = -$19.68

Adding these together:

$123 (January 16) + $115 (January 10) + $96 (Beginning Inventory) - $19.68 (Subtract part of January 16 included in ending inventory) = $314.32 COGS.