What is your ending inventory cost under LIFO assuming the following purchases if you sell three...
Question:
What is your ending inventory cost under LIFO assuming the following purchases if you sell three units?
| Purchase No. | Units Received | Unit Cost |
|---|---|---|
| 1 | 1 | $1 |
| 2 | 1 | $2 |
| 3 | 1 | $3 |
| 4 | 1 | $4 |
| 5 | 1 | $5 |
LIFO:
According to the last in, first out (LIFO) method of inventory value, the item that was added to your inventory list will be the item that is sold first. According to the LIFO technique, the cost of the most recent products your business has purchased (or created) is the first expensed in your cost of goods sold (COGS) computation. You'll report the lower costs of the older products as inventory as a result, which could lead to lower taxes.
Answer and Explanation: 1
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Let us first find the number of units sold as below:
Ending inventory units = Beginning inventory + Purchases - Sales
Ending inventory units = 0 +...
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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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