Q7TI-b - Horngren'S Financial And Managerial Accounting

Question

Serenity Books has the following transactions in August related to merchandise inventory.

   Aug. 1 Beginning merchandise inventory, 10 books @ \(15 each

                          3 Sold 3 books @ \)20 each

                        12 Purchased 8 books @ \(18 each

                        15 Sold 9 books @ \)20 each

                        20 Purchased 4 books @ \(20 each

                        28 Sold 5 books @ \)25 each

 

b. Determine the cost of goods sold and ending merchandise inventory using the LIFO inventory costing method assuming Serenity Books uses the periodic inventory system.

Step-by-Step Solution

Answer

Ending Inventory: $98

Cost of goods sold: $276

Step 1: Understand the problem

Analyze the question.

Step 2: Identify relevant concepts

Determine needed Other concepts.

Step 3: Apply concepts

Work through the problem.

Step 4: State the answer

The answer is:

Ending Inventory: $98

Cost of goods sold: $276