Question

Stellar Company uses a periodic inventory system. For April, when the company sold 600 units, the following information is available. Units Unit Cost Total Cost April 1 inventory280$31$ 8,680 April 15 purchase4503716,650 April 23 purchase 270 40 10,800 1,000 $36,130 Compute the April 30 inventory and the April cost of goods sold using the LIFO method.

Answer 1

inventory - $13,120

cost of goods sold - $23,010

Step-by-step explanation:

LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.

the cost of goods sold would be taken from the cost of the newest purchases.

April 23 purchase 270 x 40 = $ 10,800

600 - 270 = 330

April 15 purchase ; 330 x $37 = $12,210

cost of goods sold = $12,210 + $ 10,800 = $23,010

Inventory = the remaining part of the April 15 purchase and beginning inventory

450 - 330 = 120 x $37 = $4440

$4440 + 8,680 = $13,120