- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 6. Analysis of Inventories
- Subject 1. Inventory Valuation
CFA Practice Question
Date | units | unit price
2/4 | Purchase: 2,000 | $18
2/20 | Sale: 2,500 | $30
4/2 | Purchase: 3,000 | $23
11/4 | Sale: 2,000 | $33
1/1 | Beginning Inventory: 1,000 | $12
2/4 | Purchase: 2,000 | $18
2/20 | Sale: 2,500 | $30
4/2 | Purchase: 3,000 | $23
11/4 | Sale: 2,000 | $33
What is the cost of goods sold using LIFO under the perpetual inventory system?
Correct Answer: $88,000
11/4 Sales - COGS: 2000 x 23 = 46,000
Total COGS: 88,000
2/20 Sales - COGS: 2000 x 18 + 500 x 12 = 42,000
11/4 Sales - COGS: 2000 x 23 = 46,000
Total COGS: 88,000
User Contributed Comments 3
| User | Comment |
|---|---|
| safash | 500*12??? |
| johntan1979 | If periodic LIFO, 4,500 units sold during period: COGS = 3000 x 23 + 1500 x 18 = $96,000 |
| geofin | "Under a perpetual inventory system, changes in the inventory account are continuously updated. Purchases and sales of goods are recorded directly in inventory as they occur." Page414 of the third volume. |