Question

Jameson Company had the following balances and transactions during? 2019:

Beginning Merchandise Inventory as of January? 1, 2019	160 units at $72
March 10	Sold 80 units
June 10	Purchased 100 units at $79
October 30	Sold 100 units

What would be reported for Cost of Goods Sold on the income statement for the year ending December? 31, 2019 if the perpetual inventory system and the

Lastminus??in, first?out inventory costing method are? used?

A.

$5,760

B.

$12,960

C.

$13,660

D.

$7,900

Answer 1

Under LIFO method, latest Inventory purchased is issued first to sales and closing inventory is from units remaining after issue of inventory

80 units sold on March 10 will be issued from Beginning Merchandise Inventory as of January? 1, 2019

So, cost of goods sold out of Beginning Merchandise Inventory as of January? 1, 2019

= 80 x $72

= $ 5,760 --------------- (1)

100 units sold on October 30 will be issued from June 10 purchases

So, cost of goods sold

= 100 x $79

= $ 7,900---------------(2)

So, total cost of goods sold

= (1) + (2)

= $ 5,760 + $7,900

= $13,660

So, as per above calculations, option C is the correct option