Question

Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis

Answer 1

The amount allocated to ending inventory is $3664.

LIFO is an inventory method that means last in, first out. It means that it is assumed that the latest inventory that is sold, is the first to be sold. Ending inventory is made up of inventory that is purchased eelier.

• Total inventory sold = 40 + 26 = 68 units
• Sum of total inventory bought and beginning inventory = 10 + 60 + 30 = 100
• Ending inventory = 100 - 68 = 32
• Value of ending inventory = (22 x $112) + (10 x $120)

$2464 + $1200 = $3664

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