Date Activities Units Acquired at Cost Units Sold at Retail
May 1 Beginning Inventory 150 units at $10.00
5 Purchase 220 units at $12.00
10 Sales 140 units at $20.00
15 Purchase 100 units at $13.00
24 Sales 90 units at $21.0
Answer:
Closing inventory value = $1290
Explanation:
In the LIFO inventory system, inventory units are valued utilizing the prices from the most recent purchase, and this continues sequentially.
The value of the closing inventory = Total cost of available inventory for sale - total cost of goods sold
The cost of inventory sold is calculated as follows:
140 units:140 × $12=1,680
90 units: 90× $13 = 1,170
Total cost of goods sold = 1,680
+ 1,170 = 2,850
Total cost of inventory available for sale is equal to:
(150 × $10.00) + (220 ×$12.00) = 4,140
Value of closing inventory = Total cost of available inventory for sale - total cost of goods sold
4,140 - 2,850
= $1290
Closing inventory value = $1290
