Assume Baxter Manufacturing begins March with 25 units of inventory that cost $20 each. During March, the following purchases and goods sold were: March 15 Purchased 10 units at $22 30 Sold 30 units Using the LIFO inventory costing method and the perpetual system, what is the ending Merchandise Inventory on March 30?

The Ending Merchandise Inventory on March 30 is 5 units @ $20 = $ 100

Explanation:

Purchases of March 15     10 unit @ $22                    $ 220

Sales                            30 units

Less March 15            10 units

Less Beginning          20 units

Remaining Beginning 5 units at $ 20= $100

The Ending Merchandise Inventory on March 30 is 5 units @ $20 = $ 100

The Last in First out (LIFO) method of assigning costs assumes that the most recent purchases are sold first. These most recent costs are charged to the cost of goods sold and the cost to earliest purchases are assigned to merchandise inventory .

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