During 2015, a company sells 400 units of inventory for $85 each. The company has the following...
Question:
During 2015, a company sells 400 units of inventory for $85 each. The company has the following inventory purchase transactions for 2015:
| Date | Transaction | Number of Units | Unit Cost | Total Cost |
|---|---|---|---|---|
| Jan 1 | Beginning Inventory | 60 | $70 | $4,200 |
| May 5 | Purchase | 180 | 72 | 12,960 |
| Nov 3 | Purchase | 190 | 75 | 14,250 |
| 430 | $31,410 |
Required:
Calculate ending inventory and cost of goods sold for 2015, assuming the company uses LIFO with a periodic inventory system.
Inventory valuation methods.
Last-In-First-Out is one of the recognized methods that can be used to calculate the cost of inventory on hand. The method operates from the assumption that the newest inventory will be sold first and so the inventory on hand will be carried at the oldest purchase price.
Answer and Explanation: 1
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View this answerWe can calculate both items like this:
| Date | Transaction | Number of Units | Unit Cost | Total Cost |
|---|---|---|---|---|
| Jan 1 | Beginning Inventory | 60 | $70 | $4,200 |
| May 5 | Purchase | ... |
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Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average
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Chapter 6 / Lesson 11
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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.
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