Requirement 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method.

Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.)

Purchases Cost of Goods Sold Inventory on Hand Total Unit Total Unit Total Unit Cost Quantity Cost Quantity Cost Cost Quantity Cost Cost Date May 1 16 65 1040 11 780 65 1040 18 780 Totals Compute gross profit using the LIFO inventory costing method. Gross profit is $ L u sing the LIFO inventory costing method. May 1 Beginning merchandise inventory 11 Purchase A 23 Sale 16 tires @ $ 10 tires @ $ 12 tires @ $ 14 tires @ $ 18 tires @ $ 65 each 78 each 89 each 80 each 89 each 26 Purchase 29 Sale