Precision Company uses the perpetual inventory method. It has provided the following inventory information for the month of May 2014: May 1 On hand, 20 units @ $25.00 each  May 8 Purchased 100 units @ $34.60 each  May 15 Sold 90 units @ $120.00 each  May 24 Purchased 75 units @ $40.00 each  May 29 Sold 65 units @ $130.00 each   Determine Precision Company’s Cost of Ending Inventory for May 2014 using Weighted Average method. answer is :1520 explain how to get to this number

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A: Note: Colour coding has been used for better understanding. Answers can be given without coding as…

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A: Notes : Under LIFO system the units purchased last will be issued first.

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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.