Accounting for Inventory Sales - Intermittent LIFO example

The video tutorial explains how to apply the LIFO (Last In, First Out) method for inventory accounting, focusing on calculating the cost of goods sold (COGS) for intermittent purchases and sales. It compares LIFO with FIFO (First In, First Out), highlighting that while journal entries for purchases remain the same, the COGS and inventory values differ. The tutorial walks through two sales transactions, detailing the calculations for each using LIFO, and concludes with a summary of total revenue, COGS, gross profit, and ending inventory.

What is the LIFO method and how does it differ from FIFO?

Explain the journal entries involved in the January 15th purchase.

How is the COGS calculated for the first sale on April 1st?

What steps are taken to determine the COGS for the May purchase?

Describe how the total revenue is calculated from the sales.

What is the gross profit and how is it derived from sales revenue and COGS?

How is the ending inventory determined using the LIFO method?