### Inventory Analysis for Herb's Chemicals**Initial Inventory:**- Date: March 1, 2024- Quantity: 1,000 gallons- Cost: $7.20 per gallon- Total Value: $7,200**Purchase Records:**- **March 10:** 600 gallons at $7.25 each- **March 16:** 800 gallons at $7.30 each- **March 23:** 600 gallons at $7.35 each**Sales Records:**- **March 5:** 400 gallons- **March 14:** 700 gallons- **March 20:** 500 gallons- **March 26:** 700 gallons**Objective:**Calculate the ending inventory using the Last-In, First-Out (LIFO) method in a perpetual inventory system.**Multiple Choice Options for Ending Inventory Value:**1. $5,0802. $4,9603. $5,0604. $5,140---**Explanation:**- The LIFO method assumes that the most recently purchased items are sold first. Therefore, calculate the cost of the remaining inventory after all sales using the cost of the earliest remaining purchases.

LIFO Method: 1. LIFO is an inventory valuation method where the last items added to inventory are the first to be recognized as issue.2. In a perpetual inventory system, which involves continuously updating the inventory balance after each transaction, LIFO assumes that the most recently acquired or produced items are the first to be sold.3. When prices rise, using LIFO for inventory valuation can result in lower reported profits and lower tax liabilities because the cost of goods sold is based on the higher costs of recently acquired items.Store Ledger Account(Under LIFO Method)ReceiptsIssueBalance stockDate Qty.RateAmountQty.RateAmountQty.RateAmountMarch 1, 202410007.20720010007.207200March 54007.2028806007.204320March 106007.2543506006007.207.2543204350March 14700600@7.25100@7.2050705007.203600March 168007.3058405008007.207.3036005840March 205007.3036505003007.207.3036002190March 236007.3544105003006007.207.307.35360021904410March 26700600@7.35100@7.3044107305002007.207.3036001460Total ending inventory=$( 5007.20)+$(2007.30) = $3600+$1460 =$5060Total ending inventory is $5,060 and option "C " is correct.

Business

Accounting

Inventory records for Herb's Chemicals revealed the following: March 1, 2024, inventory: 1,000 gallons @ $7.20 per gallon = $7,200 Sales: March 5 March 14 March 20 March 26 Purchases: March 10 March 16 March 23 600 gallons @ $7.25 800 gallons @ $7.30 600 gallons @ $7.35 400 gallons 700 gallons 500 gallons 700 gallons Ending inventory assuming LIFO in a perpetual inventory system would be:

Inventory records for Herb's Chemicals revealed the following: March 1, 2024, inventory: 1,000 gallons @ $7.20 per gallon = $7,200 Sales: March 5 March 14 March 20 March 26 Purchases: March 10 March 16 March 23 600 gallons @ $7.25 800 gallons @ $7.30 600 gallons @ $7.35 400 gallons 700 gallons 500 gallons 700 gallons Ending inventory assuming LIFO in a perpetual inventory system would be:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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