Williams Company had the following balances and transactions during 2013. What would the company's inventory amount be on the December 31, 2013 balance sheet if the perpetual LIFO method is used? (Answers are rounded to the nearest dollar.)

Question

Williams Company had the following balances and transactions during 2013.  What would the company's inventory amount be on the December 31, 2013 balance sheet if the perpetual LIFO method is used? (Answers are rounded to the nearest dollar.)

Quizplus · Accepted Answer

Using the perpetual LIFO method, we start with the most recent purchases and work backwards. Therefore, the ending inventory would consist of the last two purchases: 300 units at $4.00 and 200 units at $5.00. Using LIFO, we would assume that the last units purchased are the first ones sold, so we would value the ending inventory as 200 units at $5.00 and 100 units at $4.00, for a total of $1,100.

Williams Company Had the Following Balances and Transactions During 2013