Esquire Inc. uses the LIFO method to value its inventory. Inventory at January 1

Question

Esquire Inc. uses the LIFO method to value its inventory. Inventory at January 1, 2013, was $792,000 (36,000 units at $22 each). During 2013, 112,000 units were purchased, all at the same price of $30 per unit. 116,000 units were sold during 2013. Esquire uses a periodic inventory system.

Cost of goods available for sale

BEGINNING INVENTORY   # of units______? cost per unit________?

COGS-Period LIFO

# of units sold _________?

Ending Inventory-Periodic LIFO

# of units in ending inventory?

PURCHASES

COST OF GOODS AVAILABLE FOR SALE

# OF UNITS______?

Cost per unit____?

COGS PERIODIC LIFO

#of units sold_____?

ENDING INVENTORY PERIODIC LIFO

# of units in ending inventory_____?

Complete the below table to calculate the December 31, 2013, ending inventory and cost of goods sold.

Cost of goods available for sale

BEGINNING INVENTORY   # of units______? cost per unit________?

COGS-Period LIFO

# of units sold _________?

Ending Inventory-Periodic LIFO

# of units in ending inventory?

PURCHASES

COST OF GOODS AVAILABLE FOR SALE

# OF UNITS______?

Cost per unit____?

COGS PERIODIC LIFO

#of units sold_____?

ENDING INVENTORY PERIODIC LIFO

# of units in ending inventory_____?

Explanation / Answer

Answer:

Last in first out method Particulars Units Rate in$ in$ A Inventory on Jan 1,2013 36000 22 792000 B Add: Purchases 112000 30 3360000 C=A+B Total Goods available for sale 148000 4152000 Less: Sold: with COGS P.U. of $30 112000 30 3360000 with COGS P.U. of $22 4000 22 88000 D Total Units sold 116000 (COGS) = 3448000 E=C-D Closing Inventory 32000 22 704000

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