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Unformatted text preview: Under periodic LIFO, the costs of the latest purchases starting with the end of the year are removed first. Since 4 units were sold during the year, the costs removed from inventory and charged to the cost of goods sold will be the latest cost of 4 units, which is $11 each. This means the cost of its December 31 inventory under periodic LIFO will be $31 (1 unit at $11 plus 2 units at $10). Under perpetual LIFO, the costs of the latest purchases as of the date of each sale are removed first. On March 1, the latest cost at that time for the 1 unit sold was $10. At the time of the sales on September 1, the latest costs of the 3 units sold was $11 each. Under perpetual LIFO its cost of goods sold will be $43 (1 at $10 and 3 at $11), and its inventory will be reported at a cost of $32 (2 units at $11 and 1 unit at $10)....
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This note was uploaded on 05/06/2010 for the course COMM Comm 353 taught by Professor Zhang during the Spring '09 term at The University of British Columbia.
- Spring '09