00:01
All right, so compute cost of goods sold using lifo.
00:05
Inventory at the start of the year, 20 units at $5.
00:11
Purchases on june 3 units at $6 and purchases in november 10 units at $8.
00:18
During the year, the company sold 25 units for $12 each.
00:22
The company incurred operating expenses of $50.
00:25
So we need to compute the cost of goods using the lifo method.
00:30
To calculate the cost of goods using this method, we start with the most recent purchases and work backwards.
00:37
We're going to start with the purchase of november 10 at 8 units.
00:42
So simple thing of doing is about $80, because 8 times 10, $80.
00:52
From there, we need to use the remaining 15 units, because remember, they sold 25.
00:58
We need 15 units from the beginning of inventory and the june purchases.
01:02
Since we sold 25 units, we need to use 15 units to reach that number.
01:08
We have 20 units from the beginning, 20 units from the beginning of the inventory and 3 units from june purchases, totaling to about 23 units.
01:18
These two together, 23 units.
01:26
We will use the remaining 2 units from november...