Question

Periodic Inventory-LIFO Jessie Stores uses the periodic system of calculating inventory. The following information is available for December of the current year, when Jessie Stores sold 500 units of inventory. Units Cost/Unit Total Cost Inventory, Dec. 1 300 250 $75,000 Purchases, Dec. 8 600 275 165,000 900 $240,000 Using the LIFO method, calculate Jessie Stores' inventory on December 31 and its cost of goods sold for December.

Answer 1

Answer:

COGS= $130,000

Ending inventory= $110,000

Explanation:

Giving the following information:

Units sold= 500

Purchases:

Dec. 1= 300 units at $250

Dec. 8=  600 units at $275

To calculate the cost of goods sold under the FIFO (first-in, first-out) method, we need to use the cost of the firsts units incorporated into inventory:

COGS= 300*250 + 200*275

COGS= $130,000

Now, the ending inventory:

Ending inventory= 400*275= $110,000