Asked by Annabel Marquez on May 19, 2024
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A hardware merchant using the LIFO method of valuing inventory has 200 hammers remaining in inventory. The merchant purchased hammers over a three-month period as follows: 120 purchased at $3.50 on April 1, 150 purchased at $3.62 on May 1, and 150 purchased at $3.72 on June 1. Compute the value of the ending inventory of hammers at LIFO cost.
LIFO Method
An inventory valuation method that assumes the last items placed in inventory are the first sold during an accounting year; stands for Last-In, First-Out.
Ending Inventory
The total value of a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold, at the end of an accounting period.
Hammers
Hammers are hand tools with a weighted head fixed to a long handle, used for delivering an impact to an object.
- Grasp the fundamentals of and apply inventory auditing techniques, notably the LIFO, FIFO, and average cost methods.
- Appraise the terminal value of inventory by leveraging diverse approaches to inventory calculation.
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Learning Objectives
- Grasp the fundamentals of and apply inventory auditing techniques, notably the LIFO, FIFO, and average cost methods.
- Appraise the terminal value of inventory by leveraging diverse approaches to inventory calculation.
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