Date Activities Units Acquired at Cost Units Sold at Retail
May 1 Beginning Inventory 150 units at $10.00
5 Purchase 220 units at $12.00
10 Sales 140 units at $20.00
15 Purchase 100 units at $13.00
24 Sales 90 units at $21.0
Answer:
Value of closing inventory =$1290
Explanation:
Under the LIFO inventory system units of inventory are priced using the price of the most recent batch purchased and this continues in turn.
The value of closing inventory = Total cost of inventory available for sales - cost of goods sold
The cost of inventory sold would be determined as follows:
140 units :140 × $12=1,680
90 units : 90× $13 = 1,170
Total cost of goods = 1,680 + 1,170 = 2,850
Total cost of inventory available for sales would be equal to :
(150 × $10.00) + (220 ×$12.00) = 4,140
The value of closing inventory = Total cost of inventory available for sales - cost of goods sold
4,140 - 2,850 = $1290
Value of closing inventory =$1290
