Question

Melbourne Company uses the perpetual inventory method. Melbourne purchased 2,300 units of inventory that cost $15.50 each. At a later date the company purchased an additional 2,400 units of inventory that cost $16.00 each. If Melbourne uses a LIFO cost flow method, and sells 2,600 units of inventory, the amount of ending inventory appearing on the balance sheet will be:

Answer 1

$32,550

Step-by-step explanation:

Data given in the question

Number of units purchased 2,300 units at $15.50

Additional units purchased 2,400 units at $16

Sale units is 2,600 units

So according to the LIFO method using the perpetual inventory method, the ending inventory is

= (2,300 units + 2,400 units - 2,600 units) × ($15.50)

= 2,100 units × $15.50

= $32,550