Question

The inventory data for an item for November are:a. Nov. 1: Inventory 20 units at $19b. Nov. 10: Purchased 30 units at $20c. Nov. 4: Sold 10 unitsd. Nov. 17: Sold 20 unitse. Nov. 30: Purchased 10 units at $21Using a perpetual system, what is the cost of the merchandise sold for November if the company uses LIFO?a. $610b. $600c. $590d. $580

Answer 1

Answer:

c.$590

Explanation:

The LIFO system is one in which items are last purchased are sold first. this may not be the best system of inventory valuation for items with expiry dates.

Given that the company sold 10 and 20 units on Nov 4 and Nov 17

The sale on Nov 4 would have been the items purchased on Nov 1 while the sale on Nov 17 must have been from the purchase made on Nov 10

Hence Inventory sold cost

= $19 * 10 + $20 *20

= $590

Answer 2

Answer:

the cost of the merchandise sold for November if the company uses LIFO is c. $590

Explanation:

LIFO Inventory System sells the Inventory recently acquired first followed by the Older Inventory Acquired.

Cost of the merchandise sold for November - Calculation

November 4 : 10 units × $19    =$190

November 17 : 20 units × $20 =$400

Total                                          =$590