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Option #2: LIFO Perpetual vs. LIFO Periodic

Below is a record of the purchases and sales of inventory throughout the first four months.

Units

Cost/Price Per Unit

1/1/x7 Beginning Balance

100

$3.50

1/31/x7 Purchase

125

$4.00

2/15/x7 Purchase

250

$4.50

2/25/x7 Sale

150

$7.75

3/10/x7 Purchase

300

$5.00

3/31/x7 Purchase

75

$5.50

4/10/x7 Sale

225

$8.25

4/15/x7 Purchase

100

$6.00

4/30/x7 Sale

350

$8.50

Requirement

  1. Calculate the cost of goods sold under the LIFO Perpetual Method for each of the below sales.

Units

Cost Per Unit

Total

2/25/x7 Sale

Show Detail

Show Detail

4/10/x7 Sale

Show Detail

Show Detail

4/30/x7 Sale

Show Detail

Show Detail

Total

  1. Calculate the cost of goods sold under the LIFO Periodic Method for each of the below sales.

Units

Cost Per Unit

Total

2/25/x7 Sale

Show Detail

Show Detail

4/10/x7 Sale

Show Detail

Show Detail

4/30/x7 Sale

Show Detail

Show Detail

Total

  1. What is the main reason for the differences in the two methods?
Answer
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