Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under LIFO

Presented below is information related to

Blowfish radios for the Hootie Company for the month of July.

Date Transaction Units

In

Unit

Cost

Total Units

Sold

Selling

Price

Total
July 1 Balance 100 $4.10 $ 410
6 Purchase 800 4.20 3,360
7 Sale 300 $7.00 $ 2,100
10 Sale 300 7.30 2,190
12 Purchase 400 4.50 1,800
15 Sale 200 7.40 1,480
18 Purchase 300 4.60 1,380
22 Sale 400 7.40 2,960
25 Purchase 500 4.58 2,290
30 Sale 200 7.50 1,500
Totals 2,100 $9,240 1,400 $10,230

Assuming that the periodic inventory method is used, compute the inventory cost at July 31 under LIFO

Solution

LIFO Method to value inventory;

Opening balance of stock= 100 units

6th July purchases made= 800 units

7th July sales of 300 units are done, (so here first from purchases off 300 units will be released on 6th July) (balance left in purchases from 6th July is 500 & opening stock 100 units)

10th July sales of 300 units are made (so here units are taken from the purchase made on 6th July (balance left in purchases from 6th July is 200 units & opening stock 100 units)

12th July purchases is made of 400 units

15th July sales of 200 units is done (here again it is sold from the purchases of 12th July) (balance left = 200 units from the purchase made on 12th July, balance left in purchases from………………………………………………………………..

 

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