Question

Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method.
June 1 Beginning inventory 42 units at $20 each
June 15 Sale of 34 units for $50 each
June 29 Purchase 34 units at $25 each

Answer 1

Answer:

Cost of Inventory at June 30 is $1,010

Explanation:

In LIFO the unit purchased at the last will be sold first. The earlier purchases will remain in the inventory. In this inventory system the cost of goods sold is based on the recent prices of the product.

June 1,     Beginning Inventory ( 42 x $20 )         $840

June 15,   Sales                          ( 34 x $20 )        ($680)

June 29,  Purchases                  ( 34 x $25 )         $850

Closing Inventory = ( ( 42-34 ) x 20 ) + $850 = $1,010