2023 · Q120
Consider the following information: Which one of the following is the value of inventory on January 31 under perpetual inventory system using Last-In-First-Out (LIFO) method?
General Accounting Principles, Auditing and InsuranceRecording transactions
- A₹ 6,600
- B₹ 8,600
- C₹ 10,600
- D₹ 12,000
Explanation
Under perpetual LIFO, the Jan 6 issue of 100 comes from the Jan 1 lot (leaving 100 @ Rs. 7), the Jan 9 issue of 200 comes from the Jan 8 lot (leaving 900 @ Rs. 8), and the Jan 25 purchase adds 300 @ Rs. 9. Closing inventory = 100x7 + 900x8 + 300x9 = 700 + 7,200 + 2,700 = Rs. 10,600. Hence C.