Kingbird Company uses a periodic inventory system. For April, when the company sold 470 units, the following information is available.  Units Unit Cost Total CostApril 1 inventory 290 $18  $ 5,220 April 15 purchase 400 22  8,800 April 23 purchase 310 23  7,130   1,000    $21,150 Compute the April 30 inventory and the April cost of goods sold using the LIFO method.Ending inventory $ Cost of goods sold $

Question
Asked Oct 24, 2019

Kingbird Company uses a periodic inventory system. For April, when the company sold 470 units, the following information is available.

   
Units
 
Unit Cost
 
Total Cost
April 1 inventory   290   $18     $ 5,220  
April 15 purchase   400   22     8,800  
April 23 purchase  
310
  23    
7,130
 
   
1,000
       
$21,150
 


Compute the April 30 inventory and the April cost of goods sold using the LIFO method.

Ending inventory  
$
 
Cost of goods sold  
$
 
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Expert Answer

Step 1

Inventory Valuation:

"LIFO" stands for last-in, first-out, meaning that the recently purchased inventory items are recorded as sold first. The cost associated with the inventory that was purchased last is the cost expensed first. With LIFO, the cost of inventory reported on the balance sheet represents the cost of the inventory of older purchase.

Step 2

Inventory Val...

Inventory Valuation under LIFO
Cost of Goods
Ending Inventory
Particulars
available for sale
Cost of Goods Sold
units p.u
amount Units p.uAmountUnits p.u
Amount
Opening Bal
290 18
5220
Purchases
400 22
310 23
Apr-15
Apr-23
8800
7130
310 23
160 22
7130
240 22.00
5280
3520
290
18
5220
Total
1000
21150
470
10650
530
10500
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Inventory Valuation under LIFO Cost of Goods Ending Inventory Particulars available for sale Cost of Goods Sold units p.u amount Units p.uAmountUnits p.u Amount Opening Bal 290 18 5220 Purchases 400 22 310 23 Apr-15 Apr-23 8800 7130 310 23 160 22 7130 240 22.00 5280 3520 290 18 5220 Total 1000 21150 470 10650 530 10500

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