Correction of LIFO Inventory
The Cardoza Products Company’s inventory record appears below.
|
|
Purchases |
Sales |
|
|
|
Quantity |
Unit Cost |
Quantity |
|
2006 |
9,000 |
$560 |
6,500 |
|
2007 |
9,500 |
575 |
10,000 |
|
2008 |
7,200 |
582 |
6,000 |
The company uses a LIFO cost flow assumption. It reported ending inventories as follows for its first three years of operations:
|
2006 |
$14,000 |
|
2007 |
11,600 |
|
2008 |
18,600 |
Determine if the Cardoza Products Company has reported its inventory correctly.
Assuming that 2008 accounts are not yet closed, make any necessary correcting entries.