Question

July 1 Beginning Inventory 35 units at $130 5 Purchases 240 units at $113 14 Sale 150 units 21 Purchases 140 units at $120 30 Sale 160 units Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis?

Answer 1

Total ending inventory= $12,460

Step-by-step explanation:

Giving the following information:

July 1 Beginning Inventory 35 units at $130

July 5 Purchases 240 units at $113

July 14 Sale 150 units

July 21 Purchases 140 units at $120

July 30 Sale 160 units

To calculate the ending inventory under the LIFO (last-in, first-out), we need to use the cost of the firsts units incorporated into inventory after each sale.

Ending inventory:

July 1= 35*130= $4,550

July 5= (240 - 150 - 20)*113= $7,910

July 21= (140 - 160)= 0

Total ending inventory= $12,460