Question

A company had the following... A company had the following purchases and sales during its first year of operations: Purchases Sales January: 10 units at $120 6 units February: 20 units at $125 5 units May: 15 units at $130 9 units September: 12 units at $135 8 units November: 10 units at $140 13 units On December 31, there were 26 units remaining in ending inventory. Using the perpetual LIFO inventory costing method, what is the value of cost of goods sold

Answer 1

Answer:

$5,415

Explanation:

                              Purchases              Sales

January:               10 units at $120      6 units at $120

February:            20 units at $125      5 units at $125

May:                     15 units at $130      9 units at $130

September:         12 units at $135       8 units at $135

November:          10 units at $140      13 units at $140

On December 31, there were 26 units remaining in ending inventory.

When you use last in, first out (LIFO) method, you calculate cost of goods sold based on the price of the last units purchased.

COGS:

• January: 6 units at $120 = $720
• February: 5 units at $125 = $625
• May: 9 units at $130 = $1,170
• September: 8 units at $135 = $1,080
• November: 13 units at $140 = $1,820
• total $5,415