Sassy Saxophones has the following inventory data: $$\begin{array} { r l l }
\text { July } 1 & \text { Beginning inventory } & 50 \text { units at } \$ 120 \
5 & \text { Purchases } & 300 \text { units at } \$ 112 \
14 & \text { Sale } & 200 \text { units } \
21 & \text { Purchases } & 150 \text { units at } \$ 115 \
30 & \text { Sale } & 140 \text { units }
\end{array}$$ Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis?
A)$18,320
B)$18,370
C)$38,480
D)$38,530

Question

Sassy Saxophones has the following inventory data: $$\begin{array} { r l l } 
\text { July } 1 & \text { Beginning inventory } & 50 \text { units at } \$ 120 \
5 & \text { Purchases } & 300 \text { units at } \$ 112 \
14 & \text { Sale } & 200 \text { units } \
21 & \text { Purchases } & 150 \text { units at } \$ 115 \
30 & \text { Sale } & 140 \text { units }
\end{array}$$ Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis?
A)$18,320
B)$18,370
C)$38,480
D)$38,530

Quizplus · Accepted Answer

Under LIFO, the last items purchased are the first to be sold. After the sales, 160 units remain (50 from beginning inventory and 110 from July 5 purchase). Ending inventory = (50 units x $120) + (110 units x $112) = $18,320.

Sassy Saxophones Has the Following Inventory Data Assuming That a Periodic Inventory System Is Used, What Is