Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales for Item CZ83 are as follows: 92 units@ $18 74 units 102 units @ $20 86 units July 1 Inventory 5 Sale 11 Purchase 21 Sale Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of merchandise sold on July 21 and (b) the inventory on July 31 a. Cost of merchandise sold on July 21 b. Inventory on July 31 Feedback Check My Work a. When the LIFO method is used, the cost of the units sold is the cost of the most recent purchases. Think of your inventory in terms of "layers." Determine how much inventory remains from each layer after each sale b. The ending inventory is made up of the oldest purchases. Learning Objective 3