Answer:
a. The cost of merchandise sold on January 21: $1,479
b. The inventory on January 31: $574
19 units, $15 per unit, total $285
17 units $17 per unit, total $289
Explanation:
The LIFO is a method used to account value for inventory. Under the method, the last item of inventory purchased is the first one sold.
1. Jan 1, Inventory 94 units, $15 per unit. Total $1,410
2. Jan 5 Sale 75 units
Cost of goods sold = 75 x $15 = $1,125
The inventory = $1,410 - $1,125 = $285 (19 units, $15 per unit)
3. Jan 11 Purchase 104 units @ $17 per unit
The inventory: $2,053
19 units, $15 per unit, total $285
104 units $17 per unit, total $1,768
4.Jan 21 Sale 87 units
Cost of goods sold = 87 x $17 = $1,479
The inventory: $574
19 units, $15 per unit, total $285
17 units $17 per unit, total $289
5. Jan 31
The inventory: $574
19 units, $15 per unit, total $285
17 units $17 per unit, total $289
