Question

An analyst gathered the following information about a company for a fiscal year: QuarterPurchases in UnitsCost per UnitPurchases in DollarsUnit Sales Per Quarter Q1100$12.00$1,200200 Q2200$14.00$2,800200 Q3300$16.00$4,800300 Q4400$18.00$7,200300 FY total1,000 $16,0001000 Beginning Inventory200$10.00$2,000 Ending Inventory under LIFO perpetual is closest to:

Answer 1

Answer:

Ending Inventory under LIFO perpetual is closest to:

$2,800.

Explanation:

a) Data and Calculations:

Quarter    Purchases    Cost per Unit    Purchases in   Sales Per Quarter

                  in Units                                  Dollars Unit

Beginning    200                $10.00            $2,000

Q1                 100                $12.00             $1,200                  200

Q2               200                $14.00             $2,800                 200

Q3               300                $16.00             $4,800                 300

Q4              400                 $18.00             $7,200                 300

FY total    1,200                                       $16,000                1000

LIFO Ending Inventory:

Beginning    100                $10.00            $1,000

Q4                100                $18.00            $1,800

Total            200                                      $2,800

b) LIFO (Last-in, First-out) is based on the assumption that inventory items sold are from the latest units in store and not from the earlier units.  This means that items bought last are sold first.  Therefore, to determine the value of ending inventory,