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Periodic inventory system and the lifo inventory cost method

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1.The Reuschel Company began 2013 with inventory of 10,000 units at a cost of $7 per unit. During 2013, 50,000 units were purchased for $8.50 each. Sales for the year totaled 54,000 units leaving 6,000 units on hand at the end of 2013. Reuschel uses a periodic inventory system and the LIFO inventory cost method.

Required:
1. Calculate cost of goods sold for 2013.
2. From a financial reporting perspective, what problem is created by the use of LIFO in this situation? Describe the disclosure required to report the effects of this problem.

Reference no: EM13882792

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