The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of La Fleur, Inc. for an operating period. Units Unit Total Units Cost Cost Sold Beginning Inventory 30 $28 $ 840 Sale No. 1 20 Purchase No. 1 50 40 2,000 Sale No. 2 40 Purchase No. 2 20 44 880 Totals 200 $3,720 60 Assuming La Fleur, Inc. uses LIFO perpetual inventory procedures, sale no. 2 is recorded as an entry to Cost of Goods Sold for: $1,120 $1,600 $1,480 $1.760

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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.