PE 7-3B Perpetual inventory using LIFO

Beginning inventory, purchases, and sales for Item MMM8 are as follows:

Jan. 1 Inventory 90 units at $17
        8 Sale 75 units
      15 Purchase 125 units at $18
      27 Sale 80 units

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine
(a) the cost of merchandise sold on January 27 and (b) the inventory on January 31.

Answer:
a. Cost of merchandise sold (January 27):
  $1,440 = (80 units × $18)  
b. Inventory, January 31:
  15 units @ $17            $ 255  
  45 units @ $18               810  
  60                               $1,065

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