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Under the periodic inventory system, Village Fabrics purchased 25 yards of blue plaid fabric at a...

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Accounting

  1. Under the periodic inventory system, Village Fabrics purchased25 yards of blue plaid fabric at a cost of $2.00 per yard on June1; on June 3, 22 yards were sold of the blue plaid; a new shipmentcame in with 25 more yards at a cost of $1.25 per yard on June 5;on June 15, 17 yards of the blue plaid fabric were sold; VillageFabrics purchased another 25-yard bolt at a cost of $1.00 per yardon June 19; on June 27, 6 more yards had been sold. What is thevalue of inventory as of June 30 under the LIFO method?

    a.

    $31.25

    b.

    $60.00

    c.

    $56.25

    d.

    $50.00

Answer & Explanation Solved by verified expert
3.9 Ratings (768 Votes)

  • The correct answer is Option ‘c’ $ 56.25 = Cost of ending inventory under LIFO Periodic
  • Workings

Units sold = 22 + 17 + 6 = 45

LIFO

Cost of Goods available for sale

Cost of Goods Sold

Ending Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

25

$                   2.00

$                              50.00

0

$           2.00

$                        -  

25

$           2.00

$                  50.00

Purchases:

0

$                       -  

$                                     -  

05-Jun

25

$                   1.25

$                              31.25

20

$           1.25

$                 25.00

5

$           1.25

$                     6.25

19-Jun

25

$                   1.00

$                              25.00

25

$           1.00

$                 25.00

0

$           1.00

$                         -  

TOTAL

75

$                            106.25

45

$                 50.00

30

$                  56.25 = Answer

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