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18 July, 07:22

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?

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  1. 18 July, 07:32
    0
    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.
  2. 18 July, 11:06
    0
    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
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