100%(1)1 out of 1 people found this document helpful
This preview shows page 1 - 2 out of 2 pages.
Cindy Sheppard runs a candy shop. She enters into the following transactions during July:July 1 Purchases 1,200 lollypops at $1 each.July 13 Purchases 500 lollypops at $1.20 each.July 14 Sells 700 lollypops at $2 each.First of all, how many lollypops does she have at the end of the month?cost of $1.10 per lollypop ($1,100/1,000 lollypops).
2. The Last-In-First-Out Method (LIFO)This method assumes that the lastinventories bought are the firstones to be sold, and that inventories bought first are sold last.The value of our closing inventories in this example would be calculated as follows:Using the Last-In-First-Out method, our closing inventory comes to $1,000. This equates to acost of $1.00 per lollypop ($1,000/1,000 lollypops).The LIFO method is commonly used in the U.S.A.