required information the following information applies to the questions displayed below. briannas boutique…

required information the following information applies to the questions displayed below. briannas boutique has the following transactions related to its top - selling gucci purse for the month of october. date transactions units unit cost october 1 beginning inventory 6 $740 october 4 sale 4 october 10 purchase 5 750 october 13 sale 3 october 20 purchase 4 760 october 28 sale 7 october 30 purchase 7 770 using lifo, calculate ending inventory and cost of goods sold at october 31. ending inventory cost of goods sold

required information the following information applies to the questions displayed below. briannas boutique has the following transactions related to its top - selling gucci purse for the month of october. date transactions units unit cost october 1 beginning inventory 6 $740 october 4 sale 4 october 10 purchase 5 750 october 13 sale 3 october 20 purchase 4 760 october 28 sale 7 october 30 purchase 7 770 using lifo, calculate ending inventory and cost of goods sold at october 31. ending inventory cost of goods sold

Answer

Explanation:

Step1: Calculate total units available for sale

Total units = 6 (beginning inventory)+4 (Oct 10 purchase)+3 (Oct 20 purchase)+7 (Oct 30 purchase)=20 units

Step2: Calculate total units sold

Units sold = 4 (Oct 4 sale)+3 (Oct 13 sale)+7 (Oct 28 sale)=14 units

Step3: Calculate ending - inventory units

Ending inventory units = 20 - 14=6 units

Step4: Calculate cost of goods sold using LIFO

Under LIFO, we assume the last - in units are sold first. Cost of goods sold: For the Oct 4 sale of 4 units, we take from the most recent purchase (none available, so from beginning inventory at $740 per unit), cost = 4×740 = 2960 For the Oct 13 sale of 3 units, we take from the Oct 10 purchase at $750 per unit, cost = 3×750 = 2250 For the Oct 28 sale of 7 units, we take 3 units from the Oct 20 purchase at $760 per unit and 4 units from the Oct 30 purchase at $770 per unit. Cost = (3×760)+(4×770)=2280 + 3080=5360 Total cost of goods sold = 2960+2250+5360 = 10570

Step5: Calculate ending inventory cost using LIFO

Ending inventory of 6 units: We take 2 units from the Oct 30 purchase at $770 per unit and 4 units from the beginning inventory at $740 per unit. Cost of ending inventory=(2×770)+(4×740)=1540 + 2960=4500

Answer:

Ending inventory: $4500 Cost of goods sold: $10570