Question

Beginning inventory, January 1 1,450 $ 50 Transactions during the year: a. Purchase, January 30 2,150 62 b. Sale, March 14 ($100 each) (1,380 ) c. Purchase, May 1 1,130 80 d. Sale, August 31 ($100 each) (1,550 ), Calculate the cost of goods sold and ending inventory for Gladstone Company assuming it applies the LIFO cost method perpetually at the time of each sale.

Answer 1

Answer:

cost of goods sold is $197,800

ending inventory is $55,000

Explanation:

LIFO System is an Inventory Management Method that sells the Recent Inventory Acquired First followed by older Inventory.

Cost of Goods Sold

March 14 = (1,380×$62) = $85,560

August 31 = (1,130×$80) =  $90,400

                 =  (70×$62)    =   $ 4,340

                 = (350×$50)   =  $ 17,500

Total                                =  $197,800

Closing Inventory

(1,100×$50) = $55,000