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3 May, 22:35

A company had inventory on November 1 of 5 units at a cost of $19 each. On November 2, they purchased 10 units at $21 each. On November 6 they purchased 6 units at $24 each. On November 8, 10 units were sold for $54 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?

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  1. 3 May, 23:47
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    The answer is $221

    Explanation:

    LIFO means Last in First out i. e the inventory that was bought last will be sold out first.

    Opening balance:

    November 1: 5 units at $19 each

    Purchased:

    November 2: 10 units at $21 each

    Purchased:

    November 6: 6 units at $24 each

    Sold:

    November 8: 10 units at $54 each

    Total number of units bought plus Beginning inventory = 5 + 10 + 6 = 21 units

    Therefore, number of units remaining at November 8 after sales is 21 - 10

    =11 units.

    So according to LIFO, we have:

    6 units at $21 = $126

    5units at $19 = $95

    $95 + $126

    =$221
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