Beginning inventory, purchases, and sales for an inventory item are as follows:
|Sep. 1||Beginning inventory||24 units @$10|
|17||Purchase||10 units @ $15|
Assuming a perpetual inventory system and the last-in, first-out method:
a. Determine the cost of the merchandise sold for the September 30 sale.
b. Determine the inventory on September 30.
LIFO (Last-In First-Out) method is a method used to value the inventory, under which, inventory is valued assuming that the inventory that was bought last is sold first. It is used to determine the value of on-hand inventory.
Answer and Explanation: 1
a. The cost of merchandise sold for September 30, is $120.
b. The inventory on September 30, is $100.
|a. Cost of merchandise sold,...|
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fromChapter 6 / Lesson 11
Inventory valuation methods are ways that companies place a monetary value on the items they have in their inventory. Discover different inventory valuation methods, including specific identification, First-In-First-Out (FIFO), Last-In-First-Out (LIFO), and weighted average.