Assume Baxter Manufacturing begins March with 25 units of inventory that cost $20 each. During March, the following purchases and goods sold were: March 15 Purchased 10 units at $22 30 Sold 30 units Using the LIFO inventory costing method and the perpetual system, what is the ending Merchandise Inventory on March 30?

Question

Wilson Frederick

Business

18 February, 03:17

Assume Baxter Manufacturing begins March with 25 units of inventory that cost $20 each. During March, the following purchases and goods sold were: March 15 Purchased 10 units at $22 30 Sold 30 units Using the LIFO inventory costing method and the perpetual system, what is the ending Merchandise Inventory on March 30?

+4

Answers (2)

Know the Answer?

Freeman · Answer 1

The Ending Merchandise Inventory on March 30 is 5 units @ $20 = $ 100

Explanation:

Purchases of March 15 10 unit @ $22 $ 220

Sales 30 units

Less March 15 10 units

Less Beginning 20 units

Remaining Beginning 5 units at $ 20 = $100

The Ending Merchandise Inventory on March 30 is 5 units @ $20 = $ 100

The Last in First out (LIFO) method of assigning costs assumes that the most recent purchases are sold first. These most recent costs are charged to the cost of goods sold and the cost to earliest purchases are assigned to merchandise inventory.

Jasmin Keller · Answer 2

The ending merchandise inventory is $ 100

Explanation:

Computation of ending merchandise inventory

March 01 Opening inventory 25 units @ $ 20

March 15 Purchases 10 units @ $ 22

March 31 Sales (30) units

Units on hand 5 units

Under the LIFO inventory method, the units sold are from the last purchases and then the opening inventory.

In this case, the 5 units in inventory are valued from the opening inventory

Value of ending inventory 5 units @ $ 20 = $ 100