There is nothing tricky about this. It is just a matter of applying the logic used in different inventory valuation methods. it is something you have to study and learn. You have some inventory to begin with, you buy some more, and you sell some leaving you some inventory at the end of the year. In a periodic system, sales are recorded at the time of sale, but cost of goods sold is calculated at the end of the accounting period. You get different cost of goods sold and ending inventory, depending on the inventory valuation method that is used. Here is a simple example.
Jan. 1, Beginning inventory - 1,500 @ $10 = 15,000
Feb. Purchase - - 4,000 @ $11 = 44,000
March, Sale - - 3,000 units at $20
April, Purchase - - 2,500 @ $12 = 30,000
May, Sale - - 2,800 units at $20
Goods available for sale - - 8,000 units = $89,000
Sold - -, 5,800 units so ending inventory is 2,200 units.
Average cost - - $89,000 / 8,000 = $11.125
With a periodic system, you only record sales at the time of sale and you calculate cost of goods sold at the end of the accounting period from the physical count of ending inventory.
FIFO. - You assume that what was sold are the earliest units acquired and ending inventory consists of the units acquired most recently.
1,500 units sold cost $10 each = $15,000
4,000 units sold cost $11 each = 44,000
300 units sold cost $12 each = 3,600
Total 5,800 cost of goods sold = $62,600
Total available - total sold = ending inventory
$89,000 – 62,600 = $26,400
You can also verify the ending inventory:
Physical count - - 2,200 units at $12 = 26,400
Now you can do the same with LIFO but you assume that the units sold are the ones you bought most recently and what is left in ending inventory are the earliest purchases.
2,500 units sold cost $12 each = $30,000
3,300 units sold cost $11 each = 36,300
Total 5,800 cost of goods sold = $66,300
Total available - total sold = ending inventory
$89,000 – 66,300 = $22,700
You can also verify the ending inventory:
Physical count - - 2,200 units
1,500 at $10 = $15,000
700 units at $11 = $7,700
Total: 2,200 units = $22,700
Now you should be able to work your problem. It is actually the only way you learn it. you don't learn it by reading my example.
It is not appropriate of you to assign your homework to others. To get help you should do the work as well as you can and provide your solution so someone can help you by pointing out where you are wrong and by explaining areas where you show weaknesses.
A company had inventory on November 1 of 22 units at a cost of $26 each. On November 2, they purchased 27 units at $27 each. On November 6, they purchased 23 units at $28 each. On November 8, 25 units were sold for $38 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?
