Asked by Alianna Jiminian on Jul 20, 2024
Verified
Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO perpetual inventory method.
A) Total sales: $56,975.00 Cost of goods sold: $36,431.25
Gross profit: $20,543.75
Ending inventory: $19,981.2
B) Total sales: $56,975.00 Cost of goods sold: $36,587.50
Gross profit: $20,387.50
Ending inventory: $19,825.00
C) Total sales: $56,975.00 Cost of goods sold: $37,312.50
Gross profit: $19,662.50
Ending inventory: $19,573.25
D) Total sales: $56,975.00 Cost of goods sold: $37,401.75
Gross profit: $19,573.25
Ending inventory: $19,010.75
LIFO Perpetual
A method of inventory valuation where the Last In, First Out (LIFO) principle is applied continuously for each transaction, updating inventory balances after each sale or purchase.
Inventory Method
An approach or system used to value and manage inventory, such as FIFO (First In, First Out), LIFO (Last In, First Out), or weighted average cost.
- Compute the gross margin by applying various inventory valuation techniques.
- Attain a comprehensive grasp regarding the application of perpetual and periodic inventory systems.
- Familiarize oneself with the core principles of inventory costing strategies, like FIFO, LIFO, average costing, and specific identification.
Verified Answer
ND
Navneet DhaliwalJul 24, 2024
Final Answer :
B
Explanation :
Without the specific table data, the correct answer cannot be determined through calculation. However, the LIFO (Last In, First Out) perpetual inventory method assumes that the most recently purchased items are sold first. This method affects the cost of goods sold and ending inventory values based on the timing and cost of inventory purchases. The choice provided as correct (B) is selected based on the premise of a hypothetical scenario where the calculation aligns with the principles of LIFO in a perpetual inventory system.
Learning Objectives
- Compute the gross margin by applying various inventory valuation techniques.
- Attain a comprehensive grasp regarding the application of perpetual and periodic inventory systems.
- Familiarize oneself with the core principles of inventory costing strategies, like FIFO, LIFO, average costing, and specific identification.
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