Question

Delta Diamonds had 5 diamonds available for sale this year: 1 purchased June 1 for $500; 2 purchased July 9 for $550 each; and 2 purchased September 23 for $600 each. On December 24, it sold 1 of the diamonds. Using LIFO periodic, its Cost of Goods Sold is ______.

Answer 1

Answer:

$600

Explanation:

Data provided in the question:

Number of diamonds with delta = 5

1 diamond purchased on June 1 for  $500

2 diamond purchased on July 9 for $550 each

2 diamond purchased on September 23 for $600 each

Now,

under the LIFO (Last In First Out) , the unit purchased last will be sold first

Therefore,

Before December 24 t, last purchase was 2 diamond purchased on September 23 for $600 each

Hence,

The Cost of Goods Sold is $600