Beginning inventory, purchases, and sales for Item Echo are as follows:

Beginning inventory, purchases, and sales for Item Echo are as follows:


June 1 Inventory 100 units at $50
4 Sale 80 units
23 Purchase 125 units at $60
26 Sale 90 units





Assuming a perpetual inventory system and using the last-in, first-ou (LIFO) method, determine (a) the cost of merchandise sold on June 26 and (b) the inventory on June 30.


Answer:

a. Cost of merchandise sold (June 26):
$5,400 = (90 units × $60)
b. Inventory, June 30:
20 units @ $50 $1,000
35 units @ $60 2,100
55 $3,100