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Lannister Inc. holds 12,000 units of inventory on January 1, 2017, which have the following costs using LIFO (last-in, first-out): Inventory Lot Date Units Cost
Lannister Inc. holds 12,000 units of inventory on January 1, 2017, which have
the following costs using LIFO (last-in, first-out):
Inventory Lot | Date | Units | Cost / Unit | Total Cost |
A | 4/22/2012 | 2,000 | $60 | $120,000 |
F | 10/15/2014 | 4,000 | $84 | $336,000 |
I | 12/22/2016 | 6,000 | $125 | $750,000 |
During January 2017, Lannister records the following transactions:
- Sells 7,000 units on January 3.
- Purchases 4,000 units on January 10 at a cost of $130 per unit.
- Sells 2,000 units on January 12
- Purchases 3,000 units on January 18 at a cost of $132 per unit.
- Sells 2,000 units on January 25.
In answering the following questions, assume that Lannister uses a perpetual LIFO inventory system. Do not include a $ with any of your answers.
- Using perpetual LIFO, what was Lannisters cost of goods sold (COGS) for the sale that occurred on January 3?
- Using perpetual LIFO, what Lannisters cost of goods sold (COGS) for the sale that occurred on January 12?
- Using perpetual LIFO, what was Lannisters cost of goods sold (COGS) for the sale that occurred on January 25?
- Using perpetual LIFO, what was cost of goods sold (COGS) for the month of January, 2017?
- Compared to your result using periodic LIFO in question 1, is Lannister's LIFO COGS for January 2017 higher or lower using the perpetual system? Enter H or L.
- True or false: LIFO COGS may be higher using a perpetual inventory system than a periodic system when inventory costs are steadily increasing over time. Enter T or F.
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