A company had inventory on november 1 of 5 units at a cost of $20 each. On november 2, they purchased 10 units at $22 each. On november 6 they purchased 6 units at $25 each. On november 8, 8 units were sold for $55 each. Using the lifo perpetual inventory method, what was the value of the inventory on november 8 after the sale?
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inventory on November 8 after the sale = 276 $
Step-by-step explanation:
inventory value on November 1
= 5 * 20
= 100 $
inventory value on November 2
= 100 + 10 * 22
= 320 $
inventory value on November 6
= 320 + 6 * 25
= 470 $
On November 8, 8 units were sold
LIFO ( Last in First Out has to be applied)
hence 6 unit from 6 November & 2 units from 2nd November will be consumed
Hence Inventory on November 8 = 470 - (6 * 25 + 2 * 22)
= 470 - ( 150 + 44)
= 470 - 194
= 276 $
inventory on November 8 after the sale = 276 $
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