Partridge Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows: $\begin{array}{lll}
\underline{\text { Date}}&\underline{\text { Purchases }}&\underline{\text { Sales}}\
\text { Jan. } 14 & & 375 @ \$ 14 \
\quad\quad17 & 250 @ \$ 10& \
\quad\quad25 & 250 @ \$ 11& \
\quad\quad29 & &260 @ \$ 16
\end{array}$
Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31. The cost of the inventory at January 31, under the LIFO method is:

Question

Partridge Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows: $\begin{array}{lll}
\underline{\text { Date}}&\underline{\text {  Purchases }}&\underline{\text { Sales}}\
\text { Jan. } 14 & & 375 @ \$ 14 \
\quad\quad17 &   250 @ \$ 10& \
\quad\quad25 & 250 @ \$ 11& \
\quad\quad29 & &260 @ \$ 16 
\end{array}$
  Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31. The cost of the inventory at January 31, under the LIFO method is:

Quizplus · Accepted Answer

Using the LIFO method, we assume that the last units purchased are the first to be sold, leaving the oldest units in ending inventory. Therefore, we need to determine the cost of the 365 units on hand at January 31 using the cost of the most recent purchases.

From the information given, we can determine that the company sold 500 - 365 = 135 units during January. To determine the cost of these units sold, we can use the cost of the most recent purchases, which were 200 units at $11 and 100 units at $10.50, for a total cost of:

200 x $11 = $2,200
100 x $10.50 = $1,050
Total cost of units sold = $3,250

To determine the cost of the ending inventory, we can use the cost of the oldest units on hand, which were the 200 units at $11 and 100 units at $10.50 from the beginning of the month. This gives us a total cost of:

200 x $11 = $2,200
100 x $10.50 = $1,050
Total cost of ending inventory = $3,250

Therefore, the cost of the inventory at January 31, under the LIFO method is $3,250.

Partridge Bookstore Had 500 Units on Hand at January 1