E8-22 (Alternative Inventory Methods—Comprehensive) Tori Amos Corporation began operations on December 1, 2006. The only inventory transaction in 2006 was the purchase of inventory on December 10, 2006, at a cost of $20 per unit. None of this inventory was sold in 2006. Relevant information is as follows.
Ending inventory units
December 31, 2006 100
December 31, 2007, by purchase date
December 2, 2007 100
July 20, 2007 50 150
During the year the following purchases and sales were made:
Purchases Sales
March 15 300 units at $24 April 10 200
July 20 300 units at 25 August 20 300
September 4 200 units at 28 November 18 150
December 2 100 units at 30 December 12 200
The company uses the periodic inventory method.
Determine ending inventory using dollar-value LIFO. Assume that the December 2, 2007, purchase cost is the current cost of inventory. (Hint: The beginning inventory is the base layer priced at $20 per unit.)
Click here for the solution: Tori Amos Corporation began operations on December 1, 2006
