[Seaner56]

Becker Question –

Units– Unit Cost — Total Cost– Units on Hand

Balance on 1/1 = 2,000____ $1 _____ $2,000 ______ 2,000

Purchased on 1/8 = 1,200______ 3________3,600________ 3,200

Sold on 1/23 = 1,800_______________ _____________1,400

Purchased on 1/28 = 800________5________4,000_________2,200

The question is that they want what amount this company should report as inventory on Jan 31. They want LIFO Periodic and perpetual. I understand periodic but I am lost with perpetual. The answer is 2,600 for both Periodic and Perpetual. Any help is greatly appreciated!!

Sorry for the messed up formatting..

AUD - passed
FAR - 8/29
REG -
BEC -

[sbarkerACPA]

The answer is $2,600 for periodic. For Perpetual it is $5400. For perpetual, inventory is updated after each purchase or sale event. This is also LIFO which means the first in will be the first out.

Beginning 2,000 units @ $1 = $2,000

01/08-purchased 1,200 units @ $3= $3,600 Subtotal inventory $5,600

01/23 Sold 1400 units (3,600) the 1200 units at $3

( 600) 600 of the 2000 units at $1

01/28 purchased 8,000 units @ $5 = $4,000 01/31 inventory 5,400

I hope this helps..When are computing the amounts of inventory sold you have subtract the most recent inventory purchased under LIFO

BEC: 74;81
AUD: 77
REG: 71; 80
FAR: 78
License for CPA----APPROVED
CPA Class of 2013

[Jason2345]

It's actually $3,600 for ending inventory under perpetual.

The logic behind sBaker's answer is right, he just messed up on the math.

Just a tip, perpetual and periodic aren't going to be the same. At least that will be the case on anything you see on the exam.

[wizards8507]

@sbarkerACPA is correct. #Jason2345 is not.

https://imgur.com/7Frcfgx

NY CPA

[thehip41]

Its $5,400 for the ending inventory under LIFO.

You have two layers at the end:

1400 units @ $1 = $1400

800 units @ $5 = $4000

1400+4000= $5400

Not sure where they got $3,600

FAR - 83
AUD - 73 92
BEC - 83
REG - 88

Licensed CPA in the state of Michigan

[Jason2345]

My bad, I added the 1400 from the 1st layer to the 2000 physical count from the last.

I apologize, the formatting threw me off.

[Author]

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