ABC Merchandise business follows perpetual inventory system. The business had 200 units in inventory at 1st January 2019 valued at RO 20. On 10th January Purchase was made 300 units at RO 30 each. On 30th January Sales was made 400 units at RO 40 each. What will be the cost of goods sold value at the end of January 2019 assuming that the business uses LIFO method?

Q: I dont know.how to do part a and b. Thank you for your help

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.