PA7-4 (Supplement 7A) Analyzing the Effects of the LIFO Inventory Method in a Perpetual Inventory System [LO 7-S1]

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the time of each sale, as if it uses a perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Transactions Units Unit Cost

Beginning inventory, January 1 1,600 $ 50

Transactions during the year:

a. Purchase, January 30 2,300 62

b. Sale, March 14 ($100 each) (1,410)

c. Purchase, May 1 1,160 80

d. Sale, August 31 ($100 each) (1,700)

1. Calculate the cost of goods sold and ending inventory for Gladstone Company assuming it applies the LIFO cost method perpetually at the time of each sale.