Cost of goods sold and inventory (24 marks) Rifle Co. had the following inventory information available: Date Transactions Purchases Sales Units Unit Cost Units 1 Sep Beginning inventory 300 $100 3 Sep Purchases 100 $84 5 Sep Sales 250 10 Sep Purchases 250 $80 15 Sep Sales 200 20 Sep Purchases 250 $76 28 Sep Sales 150 (Q1-A). Assume that the company uses LIFO method under the perpetual inventory system to estimate cost of goods sold, please calculate the cost of sale for the month of September
Question
Cost of goods sold and inventory (24 marks)
Rifle Co. had the following inventory information available:
Date
Transactions
Purchases
Sales
Units
Unit Cost
Units
1 Sep
Beginning inventory
300
$100
3 Sep
Purchases
100
$84
5 Sep
Sales
250
10 Sep
Purchases
250
$80
15 Sep
Sales
200
20 Sep
Purchases
250
$76
28 Sep
Sales
150
(Q1-A). Assume that the company uses LIFO method under the perpetual inventory system to estimate cost of goods sold, please calculate the cost of sale for the month of September
Solution
Under the LIFO (Last-In, First-Out) method, the cost of goods sold is calculated based on the cost of the most recently purchased inventory. Here's how to calculate it:
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Calculate the cost of goods sold for the sale on September 5: The last inventory purchased before this sale was on September 3, so we use this cost first. We have 100 units at 8,400. However, we sold 250 units, so we still need to account for 150 units. The next most recent inventory is from September 1, with a cost of 100 each equals 8,400 + 23,400.
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Calculate the cost of goods sold for the sale on September 15: The last inventory purchased before this sale was on September 10, so we use this cost. We have 200 units at 16,000.
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Calculate the cost of goods sold for the sale on September 28: The last inventory purchased before this sale was on September 20, so we use this cost. We have 150 units at 11,400.
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Add up the cost of goods sold for each sale to get the total cost of goods sold for the month: 16,000 + 50,800.
So, the cost of goods sold for the month of September using the LIFO method is $50,800.
Similar Questions
Rifle Co. had the following inventory information available: Date Transactions Purchases Sales Units Unit Cost Units 1 Sep Beginning inventory 300 $100 3 Sep Purchases 100 $84 5 Sep Sales 250 10 Sep Purchases 250 $80 15 Sep Sales 200 20 Sep Purchases 250 $76 28 Sep Sales 150 Assume that the company uses Average Cost method under the perpetual inventory system to estimate cost of goods sold, please calculate the cost of sale for the month of September
Rifle Co. had the following inventory information available: Date Transactions Purchases Sales Units Unit Cost Units 1 Sep Beginning inventory 300 $100 3 Sep Purchases 100 $84 5 Sep Sales 250 10 Sep Purchases 250 $80 15 Sep Sales 200 20 Sep Purchases 250 $76 28 Sep Sales 150 Assume that the company uses LIFO method under the periodic inventory system to estimate cost of goods sold, please calculate the amount of ending inventory at the end of September
A company's inventory records report the following in November of the current year: Date Activities Units Acquired at Cost Units Sold at RetailNovember 1 Beginning inventory 5 units @ $28 = $140 November 2 Purchase 10 units @ $30 = $300 November 8 Sales 12 units @ $62November 12 Purchase 6 units @ $33 = $198 Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold?Multiple Choice$334$356$378$244$282
Periodic inventory using FIFO, LIFO, and weighted average cost methods The units of an item available for sale during the year were as follows: Date Line Item Description Units Cost per Unit Amount Jan. 1 Inventory 16 units at $34 $544 Aug. 13 Purchase 7 units at $36 252 Nov. 30 Purchase 7 units at $37 259 Available for sale 30 units $1,055 There are 18 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using the (a) first-in, first-out (FIFO) method; (b) last-in, first-out (LIFO) method; and (c) weighted average cost method (round per-unit cost to two decimal places and your final answer to the nearest whole dollar).
A company's inventory records indicate the following data for the month of January: Date Activities Units Acquired at Cost Units Sold at RetailJanuary 1 Beginning inventory 530 units @ $18 = $9,540 January 8 Purchase 510 units @ $20 = $10,200 January 12 Sale 940 units @ $70January 17 Purchase 570 units @ $22 = $12,540 January 23 Sale 385 units @ $70January 28 Purchase 630 units @ $24 = $15,120 If the company uses the LIFO perpetual inventory system, what would be the cost of the ending inventory?Multiple Choice$8,470.$20,990.$19,790.$25,300.$26,410.
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