You are the store manager at a local Best Buy. As manager, you are verifying the store’s December inventory sales and purchases. You are currently focusing on a line of HP laptops which was part of the store's major holiday discount promotion.

December data for HP laptops by week were as follows:
•· December 1 – Beginning balance: 50 units at $600 each
•· December 8 – Sold 30 units
•· December 11 – Purchased 50 units at $800 each
•· December 15 – Sold 40 units
•· December 22 – Sold 20 units
•· December 23 – Purchased 80 units at $850
•· December 30 – Sold 40 units

1. Determine the cost of ending inventory assuming a perpetual inventory system and the LIFO method is used.

2. The year-end inventory count disclosed that 45 units of HP laptops remained on the store floor. Is ending inventory value calculated in #1 accurate based upon the inventory count? If not, how would the balance sheet and income statement be affected if inventory was not corrected?

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