Beginning inventory, purchases, and sales for an inventory item are as follows: Sep. 1 Beginning Inventory 22 units @ $15 5 Sale 15 units 17 Purchase 22 units @ $18 30 Sale 16 units Assuming a perpetual inventory system and the last-in, first-out method: a. Determine the cost of goods sold for the September 30 sale. b. Determine the inventory on September 30.

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.