2.Under which of the following assumptions may the cost of goods sold include the costs of the most latest purchases of the period, even though those purchases were made after the sales took place? Under which of the following assumption may the cost of goods sold is calculated when each sale is made and, therefore, include the cost of the most recent purchases at that time. LIFO, Perpetual and PeriodicRiedel Company's inventory records showed the following transactions for the fiscal period ended June 30:UnitsCost/UnitJune 1 Inventory700$6.20June 3 Purchase4006.40June 15 Sales @ $12.00300June 22 Sales @ $12.50600June 30 Purchase6006.70Required:1. Compute the ending inventory and the cost of goods sold under the LIFO cost flow assumption assuming both a perpetual and a periodic inventory system. If required, round youranswers to the nearest dollar.LIFO - periodic:Ending inventory$4Cost of goods soldLIFO - perpetual:Ending inventory$1Cost of goods sold

The LIFO stands for last in first out , where goods purchase at last are to be sold first.

Answered: LIFO, Perpetual and Periodic Riedel…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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2.	Under which of the following assumptions may the cost of goods sold include the costs of the most latest purchases of the period, even though those purchases were made after the sales took place?
	Under which of the following assumption may the cost of goods sold is calculated when each sale is made and, therefore, include the cost of the most recent purchases at that time.

LIFO, Perpetual and Periodic
Riedel Company's inventory records showed the following transactions for the fiscal period ended June 30:
Units
Cost/Unit
June 1 Inventory
700
$6.20
June 3 Purchase
400
6.40
June 15 Sales @ $12.00
300
June 22 Sales @ $12.50
600
June 30 Purchase
600
6.70
Required:
1. Compute the ending inventory and the cost of goods sold under the LIFO cost flow assumption assuming both a perpetual and a periodic inventory system. If required, round your
answers to the nearest dollar.
LIFO - periodic:
Ending inventory
$4
Cost of goods sold
LIFO - perpetual:
Ending inventory
$1
Cost of goods sold

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