Answer:
The correct answer is $240,000.
Explanation:
According to the scenario, given data are as follows:
Beginning inventory at cost = $70,000
Beginning inventory at retail = $100,000
Net purchases at cost = $270,000
Net purchases at retail = $360,000
Total sales = $320,000
According to the LIFO method.
Particulars Cost Retail Cost/Retail Ratio
Beginning inventory $70,000 $100,000 70%
Net purchases $270,000 $360,000 75%
Total Inventory $340,000 $460,000
Total sales $320,000
Ending inventory ( Estimated )
($360,000-$320,000)× 75% $30,000
$70,000 × 70% $70,000
Ending inventory at cost $100,000
Estimated cost of goods sold $240,000.
Hence the correct answer is $240,000.
