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Shown below is activity for one of the products of Denver Office Equipment: 3 January 1 balance, 580 units @ $60 per unit $34,800 Purchases: January 10: 580 units @ $65 per unit January 20: 1,040 units @ $68 per unit Sales: January 12: 900 units January 28: 780 units Required: Compute the January 31 ending inventory and cost of goods sold for January
Shown below is activity for one of the products of Denver Office Equipment: 3
January 1 balance, 580 units @ $60 per unit $34,800 Purchases: January 10: 580 units @ $65 per unit January 20: 1,040 units @ $68 per unit Sales: January 12: 900 units January 28: 780 units
Required: Compute the January 31 ending inventory and cost of goods sold for January. assuming Denver uses LIFO and a perpetual inventory system.
Ending Inventory Cost of goods sold
Expert Solution
| LIFO Method: | |||||||||
| Date | Goods available for Sale | Cost of Goods Sold | Inventory Balance | ||||||
| Number of Unit | Cost per Unit | Total Cost | Number of Unit | Cost per Unit | Total Cost | Number of Unit | Cost per Unit | Total Cost | |
| Jan-01 | 580 | $60 | $34,800 | ||||||
| Jan-10 | 580 | $65 | $37,700 | 580 | $60 | $34,800 | |||
| 580 | $65 | $37,700 | |||||||
| Jan-12 | 580 | $65 | $37,700 | ||||||
| 320 | $60 | $19,200 | 260 | $60 | $15,600 | ||||
| Jan-20 | 1,040 | $68 | $70,720 | 260 | $60 | $15,600 | |||
| 1,040 | $68 | $70,720 | |||||||
| Jan-28 | 780 | $68 | $53,040 | 260 | $60 | $15,600 | |||
| 260 | $68 | $17,680 | |||||||
| Jan-31 | 1680 | 109940 | 520 | $33,280 | |||||
So, Cost of Goods Sold is $109,940 and Value of Ending Inventory is $33,280.
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