Required information [The following information applies to the questions displayed below.] Suppose that David has elected to account for inventories and has adopted the last-in, first-out (LIFO) inventory-flow method for his business inventory of widgets (purchase prices below). Widget Number 1 Number 2 Number 3 Widget Number 4 Number 5 Number 6 Purchase Date August 15 October 30 November 10 Cost of goods sold Ending inventory Purchase Date In late December, David sold one widget, and next year David expects to purchase three more widgets at the following estimated prices: Early spring Summer Fall Direct Cost $2,100 2,200 2,300 Other Costs $ 100 LIFO 150 100 Estimated Cost $ 2,600 2,260 2,400 Total Cost $ 2,200 2,350 2,400 What cost of goods sold and ending inventory would David record if he elects to use the LIFO method this year?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Required information
[The following information applies to the questions displayed below.]
Suppose that David has elected to account for inventories and has adopted the last-in, first-out (LIFO) inventory-flow method for his business inventory of widgets
(purchase prices below).
Widget
Number 1
Number 2
Number 3
Widget
Number 4
Number 5
Number 6
Purchase Date
August 15
October 30
November 10
Cost of goods sold
In late December, David sold one widget, and next year David expects to purchase three more widgets at the following estimated prices:
Ending inventory
Purchase Date
Early spring
Summer
Fall
Direct Cost
$ 2,100
2,200
2,300
Other Costs
$ 100
150
100
LIFO
a. What cost of goods sold and ending inventory would David record if he elects to use the LIFO method this year?
Total Cost
$2,200
2,350
2,400
Estimated Cost
$2,600
2,260
2,400
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Suppose that David has elected to account for inventories and has adopted the last-in, first-out (LIFO) inventory-flow method for his business inventory of widgets (purchase prices below). Widget Number 1 Number 2 Number 3 Widget Number 4 Number 5 Number 6 Purchase Date August 15 October 30 November 10 Cost of goods sold In late December, David sold one widget, and next year David expects to purchase three more widgets at the following estimated prices: Ending inventory Purchase Date Early spring Summer Fall Direct Cost $ 2,100 2,200 2,300 Other Costs $ 100 150 100 LIFO a. What cost of goods sold and ending inventory would David record if he elects to use the LIFO method this year? Total Cost $2,200 2,350 2,400 Estimated Cost $2,600 2,260 2,400
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