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The Lippert Company uses the perpetual inventory system. The following July data are for an item...

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Accounting

The Lippert Company uses the perpetual inventory system. Thefollowing July data are for an item in Lippert's inventory:

July1Beginning inventory60units @$11per unit
10Purchased80units @$12per unit
15Sold90units @
26Purchased55units @$13per unit

Calculate the cost of goods sold for the July 15 sale using (a)first-in, first-out, (b) last-in, first-out, and (c) theweighted-average cost methods.

Round your final answers to the nearest dollar. Forweighted-average cost, do not round the weighted-average unitcost

Answer & Explanation Solved by verified expert
3.6 Ratings (524 Votes)

Cost of goods sold for July 15 sale =

FIFO LIFO Weighted Average
Cost of Goods Sold $                 1,020 $                   1,070 $             1,041

Working

Units Cost per unit value
Beginning Balance 60 $                   11.00 $ 660
Purchases
80 $                   12.00 $ 960
Total 140 $ 1,620

.

Average Cost of Inventory
Units (A) 140
Total Cost (B) $ 1,620
Average Cost (C=B/A) $              11.5714

.

FIFO
Total Units Available for sale 140
Units Sold 90
Closing Stock in Units 50
Valuation
Ending Inventory 50 @ $             12.00 $ 600
0 @ $             25.00 $ 0
Value Of Ending Inventory $ 600
Cost of Goods sold $ 1,020
LIFO
Total Units Available for sale 140
Units Sold 90
Closing Stock in Units 50
Valuation
Ending Inventory 50 @ $             11.00 $ 550
0 @ $             24.00 $ 0
Value Of Ending Inventory $                  550
Cost of Goods sold 1620 minus 550 $              1,070
Weighted Average method
Total Units Available for sale 140
Units Sold 90
Closing Stock in Units 50
Valuation
Ending Inventory 50 @ $        11.5714 $                  579
Value Of Ending Inventory $                  579
Cost of Goods sold (Total Purchase and opening stock Minus Closing Stock) $              1,041

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