Question

The following information pertains to Julia & Company: MAR. 1ST - Begginning inventory = 30 units...

The following information pertains to Julia & Company:

MAR. 1ST - Begginning inventory = 30 units @ $5.00

MAR. 3RD- Piurchased 15 units @ $4.00

MAR. 9th - Sold 25 units @ $8.00

What is the cost of goods sold for Julia & Company assuming it uses LIFO?

  • $125.

  • $100.

  • $110.

  • $85.

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Homework Answers

Answer #1

Answer- (C). $110

Explanation-

LIFO stands for Last In First Out. As per this method the Inventory which is purchased in last is to be sold first. Accordingly,

Sales of 25 units as in March 09 will consist of 15 units of Inventory purchased as on March 03 and remaining (25 - 15 ) 10 units from Beginning Inventory.

Therefore, the Cost of Goods sold are as -

15 units from March 09 ( $4 × 15 ) = $60.

10 units from March 01 ( $ 5 × 10 ) = $50.

Total Cost of Goods sold($60 + 50 ) = $110.

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