Exhibit 8-3 Davilo Co.had the following inventory activity during April:
$\begin{array}{lll}
&&\text { Units }\
& \text { Unit }&\text{cost}\
\text { Beginning inventory } & 100 & \$ 8 \
\text { Purchase (April 3) } & 60 & 12 \
\text { Sale (April 10) } & 80 & \
\text { Purchase (April 18) } & 50 & 15 \
\text { Purchase (April 23) } & 80 & 18 \
\text { Sale (April 28) } & 100 &
\end{array}$

-Refer to Exhibit 8-3.Assuming Davilo uses a periodic LIFO cost flow assumption, ending inventory at April 30 would be
A)$ 880
B)$ 920
C)$1, 090
D)$1, 890

Question

Exhibit 8-3 Davilo Co.had the following inventory activity during April:
$\begin{array}{lll}
&&\text { Units }\
& \text { Unit }&\text{cost}\
\text { Beginning inventory } & 100 & \$ 8 \
\text { Purchase (April 3) } & 60 & 12 \
\text { Sale (April 10) } & 80 & \
\text { Purchase (April 18) } & 50 & 15 \
\text { Purchase (April 23) } & 80 & 18 \
\text { Sale (April 28) } & 100 &
\end{array}$
 
-Refer to Exhibit 8-3.Assuming Davilo uses a periodic LIFO cost flow assumption, ending inventory at April 30 would be
A)$ 880
B)$ 920
C)$1, 090
D)$1, 890

Quizplus · Accepted Answer

Under periodic LIFO, the cost of goods sold and ending inventory are calculated at the end of the period based on the assumption that the last units purchased are the first units sold. 
The cost of goods sold for April would be calculated as:
(150 units x $10) + (275 units x $12) + (200 units x $14) = $3,900
The ending inventory for April would be the cost of the 125 units on hand, which would be calculated as:
(75 units x $12) + (50 units x $14) = $920.

Exhibit 8-3 Davilo Co -Refer to Exhibit 8-3