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

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


Mar. 1 Inventory 270 units at $18
8 Sale 225 units
15 Purchase 375 units at $20
27 Sale 240 units

Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on March 27 and (b) the inventory on March 31.


Answer:

a. Cost of merchandise sold (March 27):
$4,800 = (240 units × $20)
b. Inventory, March 31:
45 units @ $18 $ 810
135 units @ $20 2,700
180 $3,510