Perpetual Inventory Using LIFO

Beginning inventory, purchases, and sales for Item $88-Hx$ are as follows:

Jan. $1$ Inventory

$82$ units @$$23$

$8$ Sale

$66$ units

$15$ Purchase

$91$ units @$$25$

$27$ Sale

$76$ units

Assuming a perpetual inventory system and using the last$-$in$,$ first$-$out $($LIFO$)$ method, determine $($a$)$ the cost of goods sold on Jan. $27$ and $($b$)$ the inventory on Jan. $31.$

a$.$ Cost of goods sold on Jan. $27$

b$.$ Inventory on Jan. $31$

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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.