Charter Company, which uses the perpetual inventory method, purchases different
ID: 2569023 • Letter: C
Question
Charter Company, which uses the perpetual inventory method, purchases different letters for resale. Character had a beginning inventory comprised of ten units at $5 per unit. The company purchased six units at $7 per unit in February, sold eight units in October, and purchased three units at $8 per unit in December.
Use the information above to answer the following question. If Charter Company uses the LIFO method, what is the cost of its ending inventory?
$56
$116
$52
$64
Use the information above to answer the following question. If Charter Company uses the LIFO method, what is the cost of goods sold for the year?
$116
$56
$52
$64
Charter Company, which uses the perpetual inventory method, purchases different letters for resale. Character had a beginning inventory comprised of ten units at $5 per unit. The company purchased six units at $7 per unit in February, sold eight units in October, and purchased three units at $8 per unit in December.
Use the information above to answer the following question. If Charter Company uses the LIFO method, what is the cost of its ending inventory?
$56
$116
$52
$64
Explanation / Answer
Q1: Answer is Ending inventory under LIFO perpertual is $ 64
Q2. Cost of goods sold under LIFO perpetual is $ 52
Explanation for both is as follows:
DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 10 5 50 10 5 50 Feb 6 7 42 10 5 50 6 7 42 Oct 6 7 42 2 5 10 8 5 40 Dec 3 8 24 8 5 40 3 8 24 8 52 11 64