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Dear John,
For LIFO, since they are accounted on the year end and not perpetually,
Is the below method; a valid approach of arriving at the answer?Purchases & OP Inv:(20 + 140 +100) = 260
Sales: ( 80 + 140) = 220
Closing Inventory: 260 – 220 = 40LIFO Valuation: (20 x $4.00) + (20 x $4.40) = $168.
Please Advice If This Method Can be Used In the Exam Instead of the Method You showed In Your Lecture.
Thank You!
It is fine here, but be careful. If (for example) they had issued 170 on 12 November, then none of the opening balance or the receipt on 8 November would be left in inventory at the end of November.
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