Question

Beginning inventory, purchases, and sales for Product XCX are as follows:

Oct 01 Beginning Inventory 26 units $15
Oct 05 Sale 13 units
Oct 17 Purchase 20 units $16
Oct 30 Sale 18 units
Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the cost of the merchandise sold for the October 30 sale and (b) the inventory on October 31.
a) Cost of merchandise sold $
b) Inventory, October 31 $

Answer 1

Cost of merchandise sold = $483 , Closing stock = $227

Step-by-step explanation:

Perpetual inventory system includes updates done, when sale or purchase transaction happens

Opening Stock = 26 units (price 15). Value = 26 x 15 = 390

Sale = 13 units, price 15. So, sales cost value = 13 x 15 = 195

Purchase = 20 units (price 16). Value = 20 x 16 = 320

Sale = 18 units, price 16. So, sales cost value = 18 x 16 = 288

Total sales cost value, or cost of merchandise sold = 195 + 288 = 483

Closing stock = Opening stock + purchase - sales cost

= 390 + 320 - 483

= $227