Answered: Altira Corporation provides the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 14MC: The costs to be accounted for consist of which of the following? A. costs added during the period B....

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Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:


Aug.1	Inventory on hand—2,000 units; cost $5.30 each.
8	Purchased 8,000 units for $5.50 each.
14	Sold 6,000 units for $12.00 each.
18	Purchased 6,000 units for $5.60 each.
25	Sold 7,000 units for $11.00 each.
28	Purchased 4,000 units for $5.80 each.
31	Inventory on hand—7,000 units.

Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using last-in, first-out (LIFO).

Cost of Goods Available for Sale
Cost of Goods Sold - August 14
Cost of Goods Sold - August 25
Inventory Balance
Cost of
Goods
Available for
Perpetual LIFO:
# of
# of
units
# of units
in ending
inventory
# of units Cost per
Cost per
unit
Cost per
unit
Cost of
Goods Sold
Cost per
unit
Cost of
units
sold
Total Cost of
Goods Sold
Ending
Inventory
sold
unit
Goods Sold
Sale
Beg. Inventory
2,000 $ 5.30
$
10,600
$
5.30
$
5.30
$
5.30
Purchases:
August 8
8,000
5.50
44,000
5.50
5.50
5.50
August 18
6,000
5.60
33,600
5.60
5.60
5.60
August 28
4,000
5.80
23,200
5.80
5.80
5.80
Total
20,000
$
111,400

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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