E Periodic LIFO
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Inventory Calculation Example**
**Beginning Inventory:**
- Jan. 1 - On hand, 10 units at $20 each
**Transactions:**
| Purchases | Sales |
|-------------------|-----------------|
| Jan. 8: 25 units at $23 each | Jan. 4: 8 units @ $75 each |
| Jan. 22: 50 units at $26 each | Jan. 15: 20 units @ $75 each |
| Jan. 28: 15 units at $29 each | Jan. 26: 52 units @ $75 each |
**Task:** Calculate the company's ending inventory on January 31 using *Periodic LIFO*.
**Options:**
- a. $544
- b. $565
- c. $430
- d. $454
**Explanation:**
Using periodic LIFO (Last In, First Out), you will determine the ending inventory by assuming that the last items purchased are the first to be sold. Calculate the value of the remaining inventory by using the costs of the earliest items purchased.
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