Question

Mar. 1 Beginning Inventory 1,000 $ 7.20 Mar. 10 Purchase 600 7.25 Mar. 16 Purchase 800 7.30 Mar. 23 Purchase 600 7.35 Marvin sold 2,300 units of inventory during the month. Ending inventory assuming LIFO would be:

Answer 1

Inventory valuation $5,140

Step-by-step explanation:

The inventory method used is LIFO, so the ending inventory shall be valued from the latest purchases.

The inventory movement can be depicted below:

March 01 Beginning Inventory 1,000 @ $ 7.20 $ 7,200

March 10 Purchases 600 @ $ 7.25 $ 4,350

March 16 Purchases 800 @ $ 7.30 $ 5.840

March 23 Purchases 600 @ $ 7.35 $ 4.410

Units sold (2,300)

Units in inventory end of March 700

Under the LIFO inventory valuation method, the latest purchases are considered for inventory valuation.

600 units from March 23 purchases 600 units @ $ 7.35 = $ 4,410

100 units from March 16 purchases 100 units @ $ 7.30 = $ 730

Total inventory value for 700 units $ 5,140