Question

5. Eversoll, Inc. has the following transactions relating to inventory for the month of June:

June 1 On hand, 50 units @ $15.00 each $ 750.00

June 5 Purchased 115 units @ $15.10 each 1,736.50

June 14 Purchased 75 units @ $15.20 each 1,140.00

Total cost of goods available for sale – 240 units $3,626.50

June 30 On hand, 90 units

If Eversoll uses the LIFO inventory cost flow assumption, the amount assigned to the June 30 inventory account for inventory on hand would be

$1,354.00

$1,366.50

$1,590.42

$1,594.00

Using the information in Question 5 above, what would Cost of Goods Sold have been for the month of June if Eversoll had used the LIFO inventory cost flow assumption:

$2,260.00

$2,265.50

$2,272.50

$2,400.10

Answer 1

Eversoll uses the LIFO inventory cost flow assumption

June 30 Inventory On hand, 90 units

since last in first out is used

June 1 On hand, 50 units @ $15.00 each $ 750.00

June 5 Purchased 40 units @ $15.10 each $ 604.00

will be remaining

amount assigned to the June 30 inventory account for inventory on hand would be $1,354.00 [750+604]

2.

cost of goods sold will be

June 14 Purchased 75 units @ $15.20 each 1,140.00 + June 5 Purchased (115-40) units @ $15.10 each 1,132.50

1140+1332.5

=2472.5