Q34PGB_2 - Horngren'S Financial And Managerial Accounting

Question

Steel It began January with 55 units of iron inventory that cost \(35 each. During January, the company completed the following inventory transactions:

Units Unit Cost Unit Sales Price

Jan. 3 Sale 45 \) 83

8 Purchase 75 $ 52

21 Sale 70 85

30 Purchase 10 55

Requirements

2. Prepare a perpetual inventory record for the merchandise inventory using theLIFO inventory costing method.

Step-by-Step Solution

Answer

Total ending inventory under the LIFO method comes out to be $1,160.

Step1: LIFO Method

The LIFO method is just the opposite of the FIFO method. This method follows the last in first out sequence to value issued goods. Thus the issued inventory is valued at the recently purchased cost, assuming that the inventories would have been issued following the last-in-first-out sequence.

Step 2: Perpetual inventory table under the LIFO method