Question

Hess Company's inventory records show the following data for the month of September: Units Unit Cost Inventory, September 1 100 $3.00 Purchases: September 8 450 3.50 September 18 300 3.70 A physical inventory on September 30 shows 150 units on hand. Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Answer 1

To calculate the value of ending inventory and cost of goods sold using the LIFO inventory costing method and a periodic inventory system, calculate the total cost of goods available for sale, subtract the ending inventory from the total cost of goods available for sale to find the cost of goods sold, and calculate the value of the ending inventory.

Step-by-step explanation:

To calculate the value of ending inventory and cost of goods sold using the LIFO inventory costing method and a periodic inventory system, follow these steps:

1. Calculate the total cost of goods available for sale by adding the inventory on September 1 to the purchases made during the month of September.
2. Calculate the cost of goods sold by subtracting the ending inventory on September 30 from the total cost of goods available for sale.
3. Calculate the value of ending inventory by multiplying the remaining units in the inventory on September 30 by their unit cost.

In this case:

• The total cost of goods available for sale is (100 * $3.00) + (450 * $3.50) + (300 * $3.70).
• The cost of goods sold is the total cost of goods available for sale minus the ending inventory on September 30.
• The value of ending inventory is the remaining 150 units in inventory on September 30 multiplied by their unit cost.