Lifo Perpetual Inventory Method at Life

Lifo Perpetual Inventory Method. Perpetual inventory system provides a running balance of cost of goods available for sale and cost of goods sold. A lifo periodic system finds the value of ending inventory by matching the cost of the earliest purchase of the accounting period to the units of ending inventory.

Under perpetual lifo the following entry must be made at the time of the sale: With lifo method, the goods will leave the stock in an order reverse of that in which the goods were added to the stock! Lifo or last in first out is an efficient technique that is used in the valuation of inventory, the goods which were added to the stock will be removed from the stock first.

Practice File to help solve FIFO, LIFO, and Moving Average

$89 will be credited to inventory and $89 will be debited to cost of goods sold. The sum of $6,080 cost of goods sold and $7,020 ending inventory is $13,100, the total inventory cost. Last in first out (lifo) is the cost flow assumption that is used by business to calculate the worth of their inventory. The balance is (120 units x $54), or $6,480.