learning: inventory and cost of goods sold\ntime\nestimated time to complete\n16 min\naccuracy\n75%\nprogress…

learning: inventory and cost of goods sold\ntime\nestimated time to complete\n16 min\naccuracy\n75%\nprogress\n12 mastered 2 incorrect 2 in progress 4 not seen\n20 total questions\nmessage\nif you are unsure you are sure about\nquestion\nlo 2 basil company had the following activity in its inventory account during march 2024:\ndate activity units cost per unit total unit costs\nmarch 1 beginning inventory 100 $4.00 $400.00\nmarch 3 purchase 1 45 4.05 182.25\nmarch 5 sale 1 50 9.00 450.00\nmarch 9 purchase 2 60 4.75 285.00\nmarch 12 sale 2 70 10.00 700.00\nmarch 14 purchase 3 10 5.00 50.00\nmarch 15 sale 3 30 12.00 360.00\nmarch 30 purchase 4 35 5.05 176.75\nbased on this information, what is the cost of goods sold for the month ended march 31, 2024, for basil company if the company uses perpetual lifo as its inventory valuation method?

learning: inventory and cost of goods sold\ntime\nestimated time to complete\n16 min\naccuracy\n75%\nprogress\n12 mastered 2 incorrect 2 in progress 4 not seen\n20 total questions\nmessage\nif you are unsure you are sure about\nquestion\nlo 2 basil company had the following activity in its inventory account during march 2024:\ndate activity units cost per unit total unit costs\nmarch 1 beginning inventory 100 $4.00 $400.00\nmarch 3 purchase 1 45 4.05 182.25\nmarch 5 sale 1 50 9.00 450.00\nmarch 9 purchase 2 60 4.75 285.00\nmarch 12 sale 2 70 10.00 700.00\nmarch 14 purchase 3 10 5.00 50.00\nmarch 15 sale 3 30 12.00 360.00\nmarch 30 purchase 4 35 5.05 176.75\nbased on this information, what is the cost of goods sold for the month ended march 31, 2024, for basil company if the company uses perpetual lifo as its inventory valuation method?

Answer

Explanation:

Step1: Identify LIFO principle

In perpetual LIFO, the last - in inventory is sold first.

Step2: Analyze Sale 1 on March 5

For the sale of 50 units on March 5, since the most recent purchase before this sale is the March 3 purchase of 45 units at $4.05 per unit and we need 50 units, we take 45 units from the March 3 purchase and 5 units from the beginning inventory. Cost from March 3 purchase: $4.05×45 = 182.25$, cost from beginning inventory: $4×5=20$. Total cost for Sale 1: $182.25 + 20=202.25$.

Step3: Analyze Sale 2 on March 12

For the sale of 70 units on March 12, the most recent purchase before this sale is the March 9 purchase of 60 units at $4.75 per unit and we need 70 units, so we take 60 units from the March 9 purchase and 10 units from the remaining beginning - inventory (100 - 5 = 95 units left after Sale 1). Cost from March 9 purchase: $4.75×60 = 285$, cost from remaining beginning inventory: $4×10 = 40$. Total cost for Sale 2: $285+40 = 325$.

Step4: Analyze Sale 3 on March 15

For the sale of 30 units on March 15, the most recent purchase before this sale is the March 14 purchase of 10 units at $5 per unit and we need 30 units, so we take 10 units from the March 14 purchase and 20 units from the remaining inventory. The cost from March 14 purchase: $5×10 = 50$, and we assume we take from the remaining beginning - inventory (95 - 10 = 85 units left after Sale 2). Cost from remaining inventory: $4×20 = 80$. Total cost for Sale 3: $50+80 = 130$.

Step5: Calculate total cost of goods sold

Total cost of goods sold = Cost of Sale 1+Cost of Sale 2+Cost of Sale 3. $202.25+325 + 130=657.25$.

Answer:

$657.25$