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30 June, 07:18

On December 31, there were 31 units remaining in ending inventory. Using the perpetual LIFO inventory costing method, what is the cost of the ending inventory?

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  1. 30 June, 07:37
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    Cost of ending inventory is $3,550

    Revised Question:

    The given question is incomplete. The complete question is as follows:

    A company had the following purchases and sales during its first year of operations:

    Purchases Sales

    January 10: 6 units at $120

    February 20: 5 units at $125

    May 15: 9 units at $130

    September 12: 8 units at $135

    November 10: 13 units at $140

    On December 31, there were 26 units remaining in ending inventory. Using the Perpetual FIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

    Explanation:

    FIFO (First in First out) inventory system refers to the inventory system in which it is assumes that first purchases are the first sold goods. So for calculating the cost of ending inventory we'll calculate the value of unsold goods.

    Calculations:

    Unsold goods Cost of unsold goods 13 (13 X $140) = $1820 8 (8 X $135) = $1080 5 (5 X $130) = $650Total unsold goods 26 Total cost of unsold goods = $3,550

    So the cost of ending inventory is $3,550
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