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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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( Appendix 6B) Inventory Costing Methods: Periodic LIFO

Refer to the information for Filimonov Inc. (p. 337) and assume that the company uses a periodic inventory system.

Required:

Calculate the cost of goods sold and the cost of ending inventory using the LIFO inventory costing method.

To determine

Concept introduction:

Periodic Inventory System:

The periodic inventory system records and updates the inventory at the end of a particular period. The inventory balance is not updated after each transaction and it is updated periodically.

LIFO method:

LIFO Stands for Last in First Out. Under this method, the latest units purchased are assumed to be sold first and cost of goods sold is calculated accordingly. The ending inventory in the method includes the oldest units purchased.

To calculate:

The Cost of goods sold and ending inventory under LIFO Periodic inventory system.

Explanation

The Cost of goods sold and ending inventory under LIFO Periodic inventory system is calculated as follows:

Filimonov Inc.
Periodic Inventory Record-LIFO
Unit Rate Total Cost
Beginning Inventory 200 $ 10 $ 2,000
Purchase -June-9

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