estcoast Purveyors had 337 computer system in stock at the end of the year. Inventory records show the following information:
Date	Qty	Cost	Total Cost
January 1	Beginning Inventory	50	$1,398	$69,900
June 21	Purchase	50	1,122	56,100
August 1	Purchase	300	894	268,200
October 23	Purchase	200	1,146	229,200
November 16	Purchase	100	1,434	143,400
Total available for sale	700		$766,800
Using the LIFO method of inventory pricing, calculate the dollar value of the ending inventory.

To calculate the dollar value of the ending inventory using the **LIFO (Last In, First Out)** method, we assume that the most recent purchases (last-in) are sold first, and the ending inventory consists of the oldest inventory.

### Available Information:
- **Total units available for sale**: 700 units
- **Total units in ending inventory**: 337 units

The goal is to calculate the value of the 337 units left in stock at the end of the year. Using the **LIFO** method, we will start with the oldest purchases and move backward until we account for all 337 units.

### Breakdown of Purchases (in chronological order):

1. **November 16 Purchase**: 
   - Units: 100
   - Cost per unit: $1,434
   - Total cost: $143,400
2. **October 23 Purchase**:
   - Units: 200
   - Cost per unit: $1,146
   - Total cost: $229,200
3. **August 1 Purchase**:
   - Units: 300
   - Cost per unit: $894
   - Total cost: $268,200
4. **June 21 Purchase**:
   - Units: 50
   - Cost per unit: $1,122
   - Total cost: $56,100
5. **January 1 Beginning Inventory**:
   - Units: 50
   - Cost per unit: $1,398
   - Total cost: $69,900

### Applying LIFO:

Since we are using **LIFO**, we need to start with the most recent purchases (November 16) and work backwards to include enough units for the 337 units remaining in inventory.

1. **Start with the oldest inventory** (January 1):
   - 50 units at $1,398 = $69,900
   (Remaining units to be valued: 337 - 50 = 287)

2. **Next, use June 21 purchase**:
   - 50 units at $1,122 = $56,100
   (Remaining units to be valued: 287 - 50 = 237)

3. **Then, use part of the August 1 purchase**:
   - We need 237 more units from this purchase.
   - 237 units at $894 = 237 × $894 = $211,878
   (Remaining units to be valued: 0, we’ve reached the required 337 units)

### Total Value of Ending Inventory:

\[
\text{Ending Inventory Value} = 69,900 + 56,100 + 211,878 = 337,878
\]

Thus, the dollar value of the ending inventory using the LIFO method is **$337,878**.

Would you like further details on the method or any other related explanation?

Here are 5 related questions for further exploration:
1. How would the result change if we used FIFO (First-In, First-Out)?
2. What is the impact of inventory valuation on financial statements?
3. Can LIFO result in tax benefits for a company?
4. How does inflation affect LIFO inventory calculations?
5. What are the advantages and disadvantages of LIFO over other methods?

**Tip:** LIFO is often chosen during periods of inflation as it can lead to higher cost of goods sold and lower taxable income.

Estcoast Purveyors had 337 computer systems in stock at the end of the year. Inventory records show the following information: Date | Qty | Cost | Total Cost - January 1 | Beginning Inventory | 50 | $1,398 | $69,900 - June 21 | Purchase | 50 | $1,122 | $56,100 - August 1 | Purchase | 300 | $894 | $268,200 - October 23 | Purchase | 200 | $1,146 | $229,200 - November 16 | Purchase | 100 | $1,434 | $143,400. Total available for sale: 700 units, $766,800. Using the LIFO method of inventory pricing, calculate the dollar value of the ending inventory.

Learn how to calculate the dollar value of ending inventory for Estcoast Purveyors using the LIFO method. This example breaks down the purchases over the year and explains how to apply the LIFO method to arrive at an ending inventory value of $337,878. Suitable for accounting students or anyone interested in inventory valuation methods.

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