PE 7-3A Perpetual inventory using LIFO

Beginning inventory, purchases, and sales for Item Gidget are as follows:

Sept. 1 Inventory 80 units at $175

10 Sale 65 units

18 Purchase 75 units at $180

27 Sale 70 units

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on September 27 and (b) the inventory on September 30.

Answer:

a. Cost of merchandise sold (September 27): $12,600 = (70 units × $180) b. Inventory, September 30: 15 units @ $175 $2,625 5 units @ $180 900 20 $3,525