Question

Given the following information, determine the cost of goods sold at December 31 using the LIFO periodic inventory method:

Answer 1

Answer:

COGS= $297

Explanation:

Giving the following information:

December 2: 5 units were purchased at $7 per unit.

December 9: 10 units were purchased at $9.40 per unit.

December 11: 12 units were sold at $35 per unit.

December 15: 20 units were purchased at $10.15 per unit.

December 22: 18 units were sold at $35 per unit.

First, we need to calculate the number of units sold:

Number of units sold= 12 + 18= 30

Now, under the LIFO (last-in, first-out) method, the cost of goods sold is calculated using the cost of the lasts units incorporated into inventory:

COGS= 20*10.15 + 10*9.4

COGS= $297