Question

Assume Ava Co. has the following purchases of inventory during the first month of operations Number of Units Cost per unit First Purchase 338 2.1 Second Purchase 188 4.1 Assuming Ava Co sells 253 units at $10 each, what is the ending balance in the inventory account if they use LIFO?

Answer 1

Answer:

$573.30

Explanation:

The computation of the ending inventory using the LIFO is shown below:

Given that

First purchase units = 338 units at $2.1

The Second purchased units = 188 units at $4.1

Sells units = 253 units at $10 each

Based on the above information, the ending inventory is

= (First purchased units + second purchased units - sells units) × cost per unit

= (338 units + 188 units - 253 units) × $2.1

= $573.30