Question

The following lots of Commodity Z were available for sale during the year. Use this information to answer the question that follows. Beginning inventory 10 units at $30 First purchase 25 units at $32 Second purchase 30 units at $34 Third purchase 10 units at $35 ​ ​ The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the LIFO method? a. $659 b. $655 c. $690 d. $620

Answer 1

Answer:

d. $620

Explanation:

The computation of the ending inventory using the LIFO method under the periodic system is shown below:

Since there is 20 units given out of which 10 units are taken for $30 and the remaining 10 units are taken for $32

Therefore,  

= 10 units ×$30 + 10 units × $32

= $300 + $320

= $620

Hence, the ending inventory using the LIFO method is $620