15. Sylvia\'s Designs Co. had the following inventory activity during April: Uni
ID: 2578023 • Letter: 1
Question
15. Sylvia's Designs Co. had the following inventory activity during April:
Units
Unit
Cost
Beginning inventory
100
$10
Purchase (April 3)
50
12
Sale (April 10)
80
Purchase (April 18)
40
14
Purchase (April 23)
60
15
Sale (April 28)
120
Assuming Sylvia's uses a perpetual LIFO cost flow assumption, ending inventory for April would be
a.
$ 750
b.
$2,560
c.
$ 500
d.
$2,310
Units
Unit
Cost
Beginning inventory
100
$10
Purchase (April 3)
50
12
Sale (April 10)
80
Purchase (April 18)
40
14
Purchase (April 23)
60
15
Sale (April 28)
120
Explanation / Answer
As per perpetual LIFO(last in first out);
Ending inventory as on April 10=(70 units@$10)=$700
Hence ending inventory=(50 units@$10)=$500(C)
As per perpetual LIFO;sale of April 10 would consist of 50 units of April3 and the balance(80-50)=30 units of beginning inventory.Hence ending inventory as on April 10=70 units@$10.
Sale on April 8 would consist of 60 units of April 23,40 units of April 18 and the balance =(120-60-40)=20 units of $10.Hence ending inventory=(70-20)=50 unots@$10.
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