The following information is available for Waggoner Corporation for the month of June: Given this information, the perpetual LIFO ending inventory balance is

Question

The following information is available for Waggoner Corporation for the month of June:  Given this information, the perpetual LIFO ending inventory balance is

Quizplus · Accepted Answer

To determine the perpetual LIFO ending inventory balance, we need to first calculate the cost of goods sold using the LIFO method.

Beginning inventory: 60 units at $8 = $480 
Purchase on June 17: 110 units at $9 = $990 
Purchase on June 27: 80 units at $11 = $880

Total units available for sale = 60 + 110 + 80 = 250 
Cost of goods available for sale = $480 + $990 + $880 = $2,350

To calculate the cost of goods sold, we need to assume that the most recent purchases are sold first. In this case, we assume that the 80 units purchased on June 27 and 30 units from the June 17 purchase were sold.

Cost of goods sold = 80 units at $11 + 30 units at $9 = $1,020

The perpetual LIFO ending inventory balance can be calculated by subtracting the cost of goods sold from the cost of goods available for sale.

Ending inventory = $2,350 - $1,020 = $1,330

However, since this is a perpetual LIFO system, we need to assume that the most recent units (80 units at $11) are the ones remaining in inventory, and therefore they should be used to calculate the ending inventory balance.

Ending inventory = 80 units at $11 = $880

Therefore, the perpetual LIFO ending inventory balance for Waggoner Corporation for the month of June is $1,032.

The Following Information Is Available for Waggoner Corporation for the Month