Homework SourseA company had inventory on November 1 of 5 units at a cost o
A company had inventory on November 1 of 5 units at a cost of $23 each. On November 2, they purchased 13 units at $25 each. On November 6 they purchased 9 units at $28 each. On November 8, 10 units were sold for $58 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?
Multiple Choice $438 $418 $415 $428 $427
Solution
C.$415.
the following table shows the calculation:
| opening inventory ($23 * 5 units) | $115 |
| add:purchases ($25*13 units) november 2 | $325 |
| add:purchases ($28*9 units) on november 6 | $252 |
| less: cost of good sold: as per LIFO the last units purchased will be sold off first, accordingly 9 units purchased on november 6 and 1 unit purchased on novemnber 2 will be forming the 10 units sold off [($28* 9)+($25*1)] | (277) |
| value of ending inventory | $415 |
