Knowee
Questions
Features
Study Tools

A company's inventory records indicate the following data for the month of January: Date Activities Units Acquired at Cost Units Sold at RetailJanuary 1 Beginning inventory 530 units @ $18 = $9,540  January 8 Purchase 510 units @ $20 = $10,200  January 12 Sale   940 units @ $70January 17 Purchase 570 units @ $22 = $12,540  January 23 Sale   385 units @ $70January 28 Purchase 630 units @ $24 = $15,120  If the company uses the LIFO perpetual inventory system, what would be the cost of the ending inventory?Multiple Choice$8,470.$20,990.$19,790.$25,300.$26,410.

Question

A company's inventory records indicate the following data for the month of January: Date Activities Units Acquired at Cost Units Sold at RetailJanuary 1 Beginning inventory 530 units @ 18=18 = 9,540  January 8 Purchase 510 units @ 20=20 = 10,200  January 12 Sale   940 units @ 70January17Purchase570units@70January 17 Purchase 570 units @ 22 = 12,540 January23Sale 385units@12,540  January 23 Sale   385 units @ 70January 28 Purchase 630 units @ 24=24 = 15,120  If the company uses the LIFO perpetual inventory system, what would be the cost of the ending inventory?Multiple Choice8,470.8,470.20,990.19,790.19,790.25,300.$26,410.

...expand
🧐 Not the exact question you are looking for?Go ask a question

Solution

To calculate the cost of the ending inventory using the LIFO (Last-In, First-Out) perpetual inventory system, we need to subtract the cost of the goods sold from the total cost of the goods available for sale.

Here's how to do it:

  1. Calculate the total cost of goods available for sale: This is the sum of the beginning inventory and all purchases made during the month. 9,540(beginninginventory)+9,540 (beginning inventory) + 10,200 (Jan 8 purchase) + 12,540(Jan17purchase)+12,540 (Jan 17 purchase) + 15,120 (Jan 28 purchase) = $47,400

  2. Calculate the cost of goods sold: Under the LIFO system, the last goods purchased are the first ones to be sold. So, we start with the last purchase made on Jan 28 and work our way back. For the 940 units sold on Jan 12, the cost is calculated as follows: 630 units @ 24(fromJan28purchase)=24 (from Jan 28 purchase) = 15,120 310 units @ 22(fromJan17purchase)=22 (from Jan 17 purchase) = 6,820 Total cost for Jan 12 sale = 15,120+15,120 + 6,820 = 21,940Forthe385unitssoldonJan23,thecostiscalculatedasfollows:260units@21,940 For the 385 units sold on Jan 23, the cost is calculated as follows: 260 units @ 22 (remaining from Jan 17 purchase) = 5,720125units@5,720 125 units @ 20 (from Jan 8 purchase) = 2,500TotalcostforJan23sale=2,500 Total cost for Jan 23 sale = 5,720 + 2,500=2,500 = 8,220 Total cost of goods sold = 21,940(Jan12sale)+21,940 (Jan 12 sale) + 8,220 (Jan 23 sale) = $30,160

  3. Subtract the cost of goods sold from the total cost of goods available for sale to get the cost of the ending inventory: 47,400(totalcostofgoodsavailableforsale)−47,400 (total cost of goods available for sale) - 30,160 (cost of goods sold) = $17,240

So, the cost of the ending inventory would be $17,240. However, this option is not available in the multiple choices provided. Please check the data or the options again.

This problem has been solved

Similar Questions

A company's inventory records indicate the following data for the month of January: Date Activities Units Acquired at Cost Units Sold at RetailJanuary 1 Beginning inventory 530 units @ $18 = $9,540  January 8 Purchase 510 units @ $20 = $10,200  January 12 Sale   940 units @ $70January 17 Purchase 570 units @ $22 = $12,540  January 23 Sale   385 units @ $70January 28 Purchase 630 units @ $24 = $15,120  If the company uses the LIFO perpetual inventory system, what would be the cost of the ending inventory?Multiple Choice$8,470.$20,990.$19,790.$25,300.$26,410.

A company's inventory records report the following in November of the current year: Date Activities Units Acquired at Cost Units Sold at RetailNovember 1 Beginning inventory 5 units @ $28 = $140  November 2 Purchase 10 units @ $30 = $300  November 8 Sales   12 units @ $62November 12 Purchase 6 units @ $33 = $198  Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold?Multiple Choice$334$356$378$244$282

A company's inventory records report the following: Date Activities Units Acquired at Cost Units Sold at RetailAugust 1 Beginning inventory 15 units @ $38 = $570  August 5 Purchase 10 units @ $39 = $390  August 12 Purchase 20 units @ $40 = $800  August 15 Sales   30 units soldUsing the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?Multiple Choice$400$290$600$1,160$1,760

Assume that three identical units are purchased separately on the following three dates and at the respective costs: June 1 at $10 June 2 at $15 July 4 at $20 The company sells two units during the period. Conclude which inventory items are sold first and which unit remains in ending inventory if the company is using the LIFO perpetual cost flow assumption.Multiple choice question.The June 1 at $10 is sold; the June 2 at $15 and the July 4 at $20 remains in ending inventory.The June 2 at $15 and the July 4 at $20 are both sold; the June 1 at $10 remains in ending inventory.The June 1 at $10 and the June 2 at $15 are both sold; the July 4 unit remains in ending inventory.

Rifle Co. had the following inventory information available: Date Transactions Purchases Sales Units Unit Cost Units 1 Sep Beginning inventory 300 $100 3 Sep Purchases 100 $84 5 Sep Sales 250 10 Sep Purchases 250 $80 15 Sep Sales 200 20 Sep Purchases 250 $76 28 Sep Sales 150 Assume that the company uses LIFO method under the periodic inventory system to estimate cost of goods sold, please calculate the amount of ending inventory at the end of September

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.