Answer:
Cost of goods sold on a LIFO basis for December = $409.50
If periodic inventory system is followed then, there is no proper weekly record, proper record is missing and therefore, average method is followed, in that case usage of LIFO or FIFO is not suggested.
Explanation:
As per LIFO method, we have Last In First Out which means the item which is last added in inventory will be sold first.
In the given instance we have things as following:
1 December opening 15 units $6.00 per unit $90.00
7 December purchased 50 units $6.60 per unit $330.00
12 December Sales 45 units $6.60 per unit $297.00
Balance after sales
15 units @ $6.00 per unit = $90.00
5 units @ $6.60 per unit = $33.00
20 December Purchased 30 units $7.50 per unit $225
29 December Sales 15 units $7.50 per unit $112.5
Balance
15 units @ $6.00 per unit = $90.00
5 units @ $6.60 per unit = $33.00
15 units @ $7.50 per unit = $112.50
As stated above, under LIFO we have Last In First Out
Cost of goods sold
12 December Sales 45 units $6.60 per unit $297.00
29 December Sales 15 units $7.50 per unit $112.5
Total cost of goods sold in December = $297 + $112.5 = $409.5
In case periodic inventory system had been used then,
no proper record is maintained, for cost at which the goods are acquired, and therefore average method is followed, since no proper cost record is maintained.
Final Answer
Cost of goods sold on a LIFO basis for December = $409.50
If periodic inventory system is followed then, there is no proper weekly record, proper record is missing and therefore, average method is followed, in that case usage of LIFO or FIFO is not suggested.
