Question

during 2024, a company sells 358 units of inventory for $87 each. the company has the following inventory purchase transactions in 2024:
date\ttransaction\tnumber of units\tunit cost\ttotal cost
january 1\tbeginning inventory\t67\t$66\t$4,422
may 5\tpurchase\t161\t68\t10,948
november 3\tpurchase\t182\t71\t12,922
\t\t410\t\t$28,292
calculate ending inventory and cost of goods sold for 2024 assuming the company uses lifo.

Explanation:

Step1: Determine units available for sale and units sold

Units available for sale = 410, units sold = 358.

Step2: Calculate units in ending inventory

Ending - inventory units=410 - 358 = 52.

Step3: Apply LIFO to cost of goods sold

Under LIFO, we sell the most - recent purchases first.
We first sell 182 units from the November 3 purchase, then 176 units from the May 5 purchase (358 - 182=176).
Cost of goods sold = (182×71)+(176×68)
= 12922+11968
= 24890.

Step4: Calculate ending inventory cost

The ending inventory comes from the beginning inventory.
Ending inventory cost = 52×66 = 3432.

Answer:

Ending inventory: $3432
Cost of goods sold: $24890