### Inventory Management: Last-In, First-Out (LIFO) Method#### Inventory Data:- **Beginning Inventory (Sep. 1):** - 25 units @ $12- **Transactions:** - **Sep. 5 - Sale:** 12 units - **Sep. 17 - Purchase:** 28 units @ $15 - **Sep. 30 - Sale:** 18 units#### Problem Statement:Assume a perpetual inventory system using the Last-In, First-Out (LIFO) method.**Questions to Answer:**a. Determine the cost of goods sold for the September 30 sale. **Answer:** $ _______b. Determine the inventory on September 30. **Answer:** $ _______---### Explanation:1. **LIFO Method Overview:** The Last-In, First-Out (LIFO) method assumes that the most recently purchased items are sold first.2. **Transaction Analysis Using LIFO:** - **For Sep. 5 Sale:** Since there have been no new purchases, this sale of 12 units will use the beginning inventory units priced at $12 each. - **For Sep. 17 Purchase:** After purchasing 28 units at $15 each, the inventory will be: - 25 units @ $12 - 28 units @ $15 - **For Sep. 30 Sale:** We use the LIFO method: - 18 units will be sold from the most recent purchase of 28 units @ $15 each.3. **Cost of Goods Sold (COGS) for Sep. 30 Sale:** - The cost of the 18 units sold on Sep. 30 will be: - 18 units @ $15 = $2704. **Ending Inventory Calculation:** - After the Sep. 30 sale, the remaining inventory will be: - (28 - 18) = 10 units @ $15 = $150 (from the Sep. 17 purchase) - 25 units @ $12 = $300 (remaining from initial inventory) - Total Ending Inventory Value: - $150 + $300 = $450---### Final Answers:a. The cost of the goods sold for the September 30 sale is $270.b. The inventory on September 30 is $450.

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Description: ### Inventory Management: Last-In, First-Out (LIFO) Method#### Inventory Data:- **Beginning Inventory (Sep. 1):** - 25 units @ $12- **Transactions:** - **Sep. 5 - Sale:** 12 units - **Sep. 17 - Purchase:** 28 units @ $15 - **Sep. 30 - Sale:** 1

There are various methods of pricing material issues such as first in first out (FIFO) method, last…

Business

Accounting

Beginning inventory, purchases, and sales for an inventory item are as follows: Sep. 1 Beginning Inventory 25 units @ $12 5 Sale 12 units 17 Purchase 28 units @ $15 30 Sale 18 units. Assuming a perpetual inventory system and the last-in, first-out method: a. Determine the cost of the goods sold for the September 30 sale. $ b. Determine the inventory on September 30. $

Beginning inventory, purchases, and sales for an inventory item are as follows: Sep. 1 Beginning Inventory 25 units @ $12 5 Sale 12 units 17 Purchase 28 units @ $15 30 Sale 18 units. Assuming a perpetual inventory system and the last-in, first-out method: a. Determine the cost of the goods sold for the September 30 sale. $ b. Determine the inventory on September 30. $

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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