Question

43. Using the information in question 42, what is the cost of goods sold for the period ended 12/31/2018?

Select one:

a. $2,080

b. $1,870

c. $2,110

d. $1,970

42. Given the following data, calculate the cost of ending inventory on 12/31/2018 using a periodic inventory system and a LIFO cost flow assumption:

1/1               Beginning inventory          50 units at $10 per unit
3/5               Purchases                         50 units at $12 per unit
5/30             Purchases                         40 units at $13 per unit
10/25           Purchases                         60 units at $14 per unit

12/31           Ending inventory               35 units

Select one:

a. $380

b. $490

c. $350

d. $420

Answer 1

42.

Under LIFO cost flow assumption, units purchased at the latest, are charged to cost first. Thus, ending inventory consists of the units purchased earlier.

Thus, ending inventory of 35 units will be valued as under:

Date	Units	Cost per unit	Total cost
1/1	35 units	$10	$350

Ending inventory = $350

Correct option is (c)

43.

Calculation of Cost of goods available for sale

1/1	50 units	$10 per unit	$500
3/5	50 units	$12 per unit	$600
5/30	40 units	$13 per unit	$520
10/25	60 units	$14 per unit	$840
			$2,460

Cost of goods available for sale = $2,460

Cost of goods sold = Cost of goods available for sale - Ending inventory

= 2,460 - 350

= $2,110

Correct option is (c)