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Question & Answer: Rivera Company had the following inventory information for the year ending Decembe…..

Rivera Company had the following inventory information for the year ending December 31 Units 25 50 35 20 130 Total $175 500 385 240 $1,300 Unit Cost $7 10 Beginning Inventory Purchases: March 3 June 15 September 28 12 Cost of Goods Available for Sale On December 31, Rivera Company had an ending inventory of 50 units. They use a periodic inventory system to compute the cost of ending inventory Required Using LIFO (a) Compute the cost of ending inventory (b) Compute the cost of goods sold Cost of ending inventory: Cost of goods sold Clear Undo Help

Rivera Company had the following inventory information for the year ending December 31: On December 31, Rivera Company had an ending inventory of 50 units. They use a periodic inventory system to compute the cost of ending inventory. Required: Using LIFO: (a) Compute the cost of ending inventory (b) Compute the cost of goods sold

Expert Answer

 

USING LIFO UNDER PERIODIC INVENTORY SYSTEM:
a) Cost of ending inventory will be at the earliest rates.
For the ending inventory of 50 units, the cost = 25*7+25*10 = $                  425
b) The cost of goods sold = Cost of goods available for sale – cost of ending inventory = 1300-425 = $                  875
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