Question

Crane uses the periodic inventory system. For the current month, the beginning inventory consisted of 7100 units that cost $12.00 each. During the month, the company made two purchases: 2800 units at $13.00 each and 12000 units at $13.50 each. Crane also sold 12700 units during the month. Using the LIFO method, what is the ending inventory? $119140. $112500. $124200. $110400.

Answer 1

Answer:

Ending inventor cost= $124,200

Explanation:

Giving the following information:

Beginning inventory= 7,100 units that cost $12.00 each.

Purchases:

2,800 units at $13.00 each

12,000 units at $13.50 each

Units sold= 12,700

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

Ending inventory in units= 9,200

Ending inventor cost= 9,200*13.5

Ending inventor cost= $124,200