EX 7-7 FIFO, LIFO costs under perpetual inventory system

The following units of a particular item were available for sale during the year:

Beginning inventory                  180 units at $80
Sale                                            120 units at $125
First purchase                             400 units at $82
Sale                                             300 units at $125
Second purchase                         300 units at $84
Sale                                             275 units at $125

The firm uses the perpetual inventory system, and there are 185 units of the item on
hand at the end of the year. What is the total cost of the ending inventory according to
(a) FIFO, (b) LIFO?

Answer:
a. $15,540 ($84 × 185 units)
b. $15,100 [($80 × 60 units) + ($82 × 100 units) + ($84 × 25 units)] = $4,800 + $8,200 + $2,100

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