Question

Whispering has the following inventory data:

July 1 Beginning inventory 28 units at $5.50
5 Purchases 110 units at $6.10
14 Sale 74 units
21 Purchases 55 units at $6.60
30 Sale 52 units

Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?

Answer 1

Answer: $‭794.6‬0

Step-by-step explanation:

Using LIFO means that the later acquired goods are sold off first. On July 14 therefore, the 74 units were sold from the units purchased on the 5th.

Cost of goods will be;

= 74 * 6.10

= $451.40

On the 30th they sold 52 more units. These would have been sold from the 21 July purchase.

= 52 * 6.6

= $343.20

Total Cost of goods = 451.40 + 343.20

= $‭794.6‬0