Asked by
Chelsea Waris
on Dec 05, 2024
Verified
The Elston Company uses a periodic inventory system.Relevant inventory information for the year follows: 1/1 Beginning inventory 20 units@ $170 per unit 5/23 Purchased 20 units@ $125 per unit11/5 Purchased 400 units@ $160 per unit 11/18 Purchased 100 units@ $175 per unit \begin{array}{llr}1 / 1 & \text { Beginning inventory } & 20 \text { units@ } \$ 170 \text { per unit } \\5 / 23 & \text { Purchased } & 20 \text { units@ } \$ 125 \text { per unit} \\11 / 5 & \text { Purchased } & 400 \text { units@ } \$ 160 \text { per unit } \\11 / 18 & \text { Purchased } & 100 \text { units@ } \$ 175 \text { per unit }\end{array}1/15/2311/511/18 Beginning inventory Purchased Purchased Purchased 20 units@ $170 per unit 20 units@ $125 per unit400 units@ $160 per unit 100 units@ $175 per unit At year-end, 50 units remain in inventory.What is the cost of the ending inventory on a LIFO basis?
A) $7, 500
B) $7, 100
C) $8, 750
D) $8, 450
Periodic Inventory System
A periodic inventory system is a method of inventory valuation in which physical inventory counts are performed at specific intervals to determine the cost of goods sold and ending inventory.
Ending Inventory
The total value of a company's inventory available at the end of an accounting period, instrumental in calculating the cost of goods sold.
Purchased Units
Units of goods or services acquired through purchase, often used to refer to inventory items bought for resale in business operations.
- Calculate the expense of goods sold and establish the ending inventory balance by applying multiple inventory costing approaches.
- Master the essentials of calculating inventory costs using methods such as FIFO, LIFO, and weighted average.
Verified Answer
JA
Learning Objectives
- Calculate the expense of goods sold and establish the ending inventory balance by applying multiple inventory costing approaches.
- Master the essentials of calculating inventory costs using methods such as FIFO, LIFO, and weighted average.