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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Questions M7-6 and M7-7 are based on the following data: City Stationers Inc. had 200 calculators on hand on January 1, 2019, costing $18 each. Purchases and sales of calculators during the month of January were as follows:

Chapter 7, Problem 7MC, Questions M7-6 and M7-7 are based on the following data: City Stationers Inc. had 200 calculators on

City uses a periodic inventory system. According to a physical count, 150 calculators were on hand at January 31, 2019.

M7-6 The cost of the inventory on January 31, 2019, under the FIFO method is:

  1. a. $400
  2. b. $2,700
  3. c. $3,100
  4. d. $3,200

M7-7 The cost of the inventory on January 31, 2019, under the LIFO method is:

  1. a. $400
  2. b. $2,700
  3. c. $3,100
  4. d. $3,200

To determine

Compute the cost of inventory under LIFO method on January 31, 2019.

Explanation

Last-in-First-Out (LIFO):

As per the LIFO method, items purchased recently are sold first. Thus, the value of the ending inventory consists the remaining unsold items at the initial cost.

Compute the cost of inventory under LIFO method:

Cost  = Number of units×Cost price=150×$18=<

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