Ask Question
28 August, 16:37

Sheridan Company uses a periodic inventory system. For April, when the company sold 450 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 280 $17 $ 4,760 April 15 purchase 420 20 8,400 April 23 purchase 300 22 6,600 1,000 $19,760 Compute the April 30 inventory and the April cost of goods sold using the LIFO method.

+1
Answers (1)
  1. 28 August, 18:55
    0
    Closing inventory - $10,160

    Costs of goods sold - $9,600

    Explanation:

    Under the LIFO Method, the cost of good sold equals to

    = April 23 units * cost per unit + Remaining units * cost per unit

    = 300 units * $22 + 150 units * $20

    = $6,600 + $3,000

    = $9,600

    Since the firm has sold 450 units, so out of which 300 units sold at a price of $22 and the remaining 150 units sold at a price of $20

    The ending inventory equals to

    = Remaining units * cost per unit + April 1 * cost per unit

    = 270 units * $20 + 280 units * $17

    = $5,400 + $4,760

    = $10,160

    Since on April 23, the 420 units were purchase, out of which 150 units are transferred to the cost of good sold and the remaining units 270 units at $20 is transferred to the ending inventory
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Sheridan Company uses a periodic inventory system. For April, when the company sold 450 units, the following information is available. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers