Question

On May 1, beginning inventory consists of 10 items at a cost of $10 each. On May 3, 10 items are purchased at $12 each. On May 8, 12 items are sold. On May 15, 10 items are purchased at $14 each. Using perpetual LIFO, ending inventory at May 31 equals?

Answer 1

$220

Explanation:

5/01: Beg. inventory: 10 × $10 = $100

5/03: Add inventory: 10 × $12 = $120

5/08: Less inventory: (10 × $12) + (2 × $10) = $140

5/15: Add inventory: 10 × $14 = $140

5/31: End. inventory: (10 × $14) + (8 × $10) = $220