Eastview Company uses a periodic LIFO inventory system,and has the following purchases and sales: What is the value of cost of goods sold?
A)$2,730.
B)$2,750.
C)$2,670.
D)$440.
E)$380.

Question

Eastview Company uses a periodic LIFO inventory system,and has the following purchases and sales:  What is the value of cost of goods sold?
A)$2,730. 
B)$2,750. 
C)$2,670. 
D)$440. 
E)$380.

Quizplus · Accepted Answer

Using periodic LIFO, the cost of the most recent purchases are assigned to cost of goods sold first. 
The cost of goods sold can be calculated as follows:
Beginning inventory: $100
First purchase: $500
Second purchase: $440
Third purchase: $360
Total cost of goods available for sale: $1,400
Sales: $1,050
Remaining inventory: (10 units at $40) = $400
Using LIFO, the cost of goods sold would be: 
(6 units from third purchase at $60) + (4 units from second purchase at $55) = $440
Therefore, the correct answer is B) $2,750.

Eastview Company Uses a Periodic LIFO Inventory System,and Has the Following