Purchases and sales during a recent period for Casora Inc. were as follows:

- Refer to Exhibit 7-4. Beginning inventory was 100 units at $2 each. Given this information, what is the ending inventory if the periodic LIFO costing alternative is used?

Question

Purchases and sales during a recent period for Casora Inc. were as follows:

- Refer to Exhibit 7-4. Beginning inventory was 100 units at $2 each. Given this information, what is the ending inventory if the periodic LIFO costing alternative is used?

Quizplus · Accepted Answer

To calculate ending inventory using periodic LIFO, we need to start with the most recent purchases and work our way backwards. Therefore, we assume that the 120 units purchased on December 31 and 80 units purchased on December 1 were sold first, leaving 100 units from the 150 units purchased on November 15. The cost of these 100 units is $2 each, or $200. Therefore, the ending inventory is $200 plus the remaining 50 units from November 15, which were purchased at $2.50 each, for a total ending inventory of $500.

Purchases and Sales During a Recent Period for Casora Inc