Question

Beginning inventory10 units @ $10 per unit First purchase35 units @ $11 per unit First sale20 units Second purchase40 units @ $12 per unit Second sale35 units Third purchase15 units @ $13 per unit What is the value of the ending inventory using a perpetual inventory system with the LIFO costing method? a) $485 b) $555 c) $520 d) $540

Answer 1

Answer:

option C

Step-by-step explanation:

given,

Beginning inventory             10 units @ $10 per unit

First purchase                        35 units @ $11 per unit

Second purchase                  40 units @ $12 per unit

Third purchase                       15 units @ $13 per unit

first sale = 20 units

second sale = 35 units

now,

unit left after first sale = 35 - 20 = 15 units @ $11 per unit

unit left after second sale = 40 - 35 = 5 @ $12 per unit

third purchase =  15 units @ $13 per unit

inventory  = 10 units @ $10 per unit + 15 units @ $11 per unit + 5 @ $12 per unit + 15 units @ $13 per unit

                = 100 + 165 + 60 + 195

                = $ 520

hence, the correct answer is option C