Task:
1/1 Beginning Inventory 1,000 Units @ $10 per Unit
3/15 Purchase of Inventory 3,500 Units @ $12 Per Unit
7/21 Sale of Inventory 4,000 units
9/12 Purchase of Inventory 1,600 Units @ $14 per unit
10/31 Sale of Inventory 1,200 Units.
Problem 1: Using LIFO, what is the Cost of Goods Sold using the Perpetual Method? What is the Cost of Goods Sold using the Periodic Method? What is the cost of ending inventory for each method?
Problem 2: Is there a difference in the Net Income for each Method? Why?
Problem 3: What are the advantages of using each method?