Question

A company had inventory on July 1 of 5 units at a cost of $16 each. On July 2, they purchased 9 units at $28 each. On July 6 they purchased 5 units at $25 each. On July 8, 8 units were sold for $58 each. Using the LIFO periodic inventory method, what was the value of the inventory on July 8 after the sale?

Answer 1

$248

Step-by-step explanation:

The LIFO inventory method implies that the inventory that was purchased last would be the first to be sold.

Here, we would compute the inventory units as seen below;

= 5 units + 9 units + 5 units - 8 units

= 11 units

Now, the value of inventory is;

= 5 units × $16 + 6 units × $28

= $80 + $168

= $248.

The 6 units come from

= 11 units - 5 units

= 6 units.

Therefore, the value of inventory is $248.