Given the following information, determine the cost of ending inventory at June 30 using the LIFO perpetual inventory method. Assume this is the first month of the company's operations. June 1: 15 units were purchased at $20 per unit.
June 15: 12 units were sold.
June 29: 8 units were purchased for $25 per unit.
A)$200
B)$220
C)$260
D)$275
E)$300

Question

Quizplus · Accepted Answer

Using the LIFO perpetual inventory method, we assume that the most recently purchased units are sold first, and so the cost of goods sold is based on the $25 units purchased on June 29.

Cost of goods sold = 12 units sold on June 15 x $20 per unit + 8 units sold on June 29 x $25 per unit = $240 + $200 = $440

The cost of ending inventory would be based on the remaining units purchased on June 1 at $20 per unit, as those are the oldest units left in inventory.

Cost of ending inventory = 15 units left x $20 per unit = $300

Therefore, the cost of ending inventory at June 30 using the LIFO perpetual inventory method is $300.

Given the Following Information, Determine the Cost of Ending Inventory