Question

Katie Malls has the following inventory transactions for the year:Date Transaction Number of units Unit cost Total costJan. 1 Beginning inventory 20 $35 $ 700Apr. 8 Purchase 50 40 2,000 $2,700Jan. 1 â Dec. 31 Total sales to customers 60What amount would Madison report for cost of goods sold using LIFO under a periodic inventory system?a) $2,100b) $2,350c) $2,300d) $2,400

Answer 1

Answer:

b) $2,350

Explanation:

The computation of the cost of goods sold under the LIFO method is shown below:

Since there is 60 unit sold

So,

= Number of units purchase × price per unit + opening inventory remaining units × price per unit

= 50 units × $40 + 10 units × $35

= $2,000 + $350

= $2,350

hence, the cost of goods sold under the LIFO method is $2,350

Therefore the correct option is b) $2,350