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During 2021, a company sells 21 units of inventory. The company has the following inventory purchase transactions for 2021: Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 18 $ 52 $ 936 Sep. 8 Purchase 12 54 648 30 $ 1,584 Calculate ending inventory and cost of goods sold for 2021 assuming the company uses LIFO.

Answer :

Answer:

Cost of goods sold = 1,116

Ending inventory = 468

Explanation:

In LIFO (last in first out) method, the goods come in most recently will come out first when it comes to sales transaction. So, 21 units of sales during 2021 includes 12 units purchased at Sep.8 and 9 units of beginning balance:

Cost of goods sold during 2021 = 12 x 54 + 9 x 52 = 1,116.

Ending inventory value for 2021 = 1,584 - 1,116 = 468.

bihariyadeep28

The value of ending inventory and cost of goods sold as per the LIFO method will be $468 and $1,116 respectively.

What is LIFO?

LIFO is an abbreviation used for last in first out which is a method of inventory valuation. This method assumes that the inventory that is last purchased is sold first.

Therefore the 21 units sold will include inventories 12 units purchased at Sep.8 and 9 units of beginning balance:

Therefore the cost of goods sold will be:

[tex]\rm Cost\:of\:goods\:sold = 12 x 54 + 9 x 52\\\\\rm Cost\:of\:goods\:sold = \$1,116[/tex]

And the ending inventory will be:

[tex]\rm Ending\:inventory = Total\:inventory - Cost\:of\:goods\:sold\\\\\rm Ending\:inventory =\$1,584 - \$1,116\\\\\rm Ending\:inventory =\$468[/tex]

The total value of inventories is calculated as a sum of value of beginning inventory and purchases.

Learn more about LIFO here:

https://brainly.com/question/13779572

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