Question

Lauer Corporation has provided the following information about one of its laptop computers: Date Transaction Number of Units Cost per Unit 1/1 Beginning Inventory 100 $ 800 5/5 Purchase 200 $ 900 8/10 Purchase 300 $ 1,000 10/15 Purchase 200 $ 1,100 During the year, Lauer sold 750 laptop computers. What was cost of goods sold using the LIFO cost flow assumption

Answer 1

Answer:

Lauer Corporation

The Cost of Goods Sold using the LIFO cost flow assumption is:

$740,000 ($780,000 - $40,000)

Explanation:

Date Transaction             Number of Units    Cost per Unit   Total

1/1      Beginning Inventory     100                   $ 800              $80,000

5/5    Purchase                      200                   $ 900               180,000

8/10   Purchase                      300                 $ 1,000              300,000

10/15 Purchase                      200                  $ 1,100              220,000

Year Total                              800                                          $780,000

Year  Sales                            750                                         $ 740,000

Year  Ending Inventory          50                   $ 800               $40,000

b) The Cost of goods sold ($740,000) is determined by subtracting the ending inventory ($40,000) from the cost of goods available for sale ($780,000).   Other method of determining the cost of goods sold under the LIFO cost flow assumption would be to add up the individual costs of purchases to the beginning inventory and then subtract ending inventory.  The LIFO cost flow assumption assumes that items sold are from the latest inventory and not the earlier ones.

Answer 2

The cost of goods sold (COGS)by using the assumption of LIFO cost Flow is $740,000.

What is LIFO method?

The full form of LIFO is the Last in first out. It is the method of the valuation of inventory, using the assumption of the last inventory should be firstly sell out.

Computation of Cost of goods sold:

$\text{Cost Of Goods Sold} = \text{Cost of Goods Available For Sale - Ending Inventory}\\\text{Cost Of Goods Sold} = (\ 780,000 - \ 40,000)\\\text{Cost Of Goods Sold} = \ 7,40,000$

The value of ending inventory and cost of goods available for sale are given in the image below.

Therefore, the cost of goods sold is $7,40,000.

Learn more about the LIFO method, refer to:

https://brainly.com/question/10239225