Answer:
Lauer Corporation
The Cost of Goods Sold using the LIFO cost flow assumption is:
$740,000 ($780,000 - $40,000)
Explanation:
Date Transaction Number of Units Cost per Unit Total
1/1 Beginning Inventory 100 $ 800 $80,000
5/5 Purchase 200 $ 900 180,000
8/10 Purchase 300 $ 1,000 300,000
10/15 Purchase 200 $ 1,100 220,000
Year Total 800 $780,000
Year Sales 750 $ 740,000
Year Ending Inventory 50 $ 800 $40,000
b) The Cost of goods sold ($740,000) is determined by subtracting the ending inventory ($40,000) from the cost of goods available for sale ($780,000). Other method of determining the cost of goods sold under the LIFO cost flow assumption would be to add up the individual costs of purchases to the beginning inventory and then subtract ending inventory. The LIFO cost flow assumption assumes that items sold are from the latest inventory and not the earlier ones.
