Classic Floors has the following inventory data: $$\begin{array} { r l c }
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 6.00 \
5 & \text { Purchases } & 120 \text { units at } \$ 6.60 \
14 & \text { Sale } & 80 \text { units } \
21 & \text { Purchases } & 60 \text { units at } \$ 7.20 \
30 & \text { Sale } & 56 \text { units }
\end{array}$$ Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?
A)$931.20
B)$472.80
C)$1,404.00
D)$696.00

Question

Classic Floors has the following inventory data: $$\begin{array} { r l c } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 6.00 \
5 & \text { Purchases } & 120 \text { units at } \$ 6.60 \
14 & \text { Sale } & 80 \text { units } \
21 & \text { Purchases } & 60 \text { units at } \$ 7.20 \
30 & \text { Sale } & 56 \text { units }
\end{array}$$ Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?
A)$931.20
B)$472.80
C)$1,404.00
D)$696.00

Quizplus · Accepted Answer

Under LIFO, the last items purchased are the first to be sold. For the sale on July 14, 80 units are sold from the July 5 purchase (80 units at $6.60 = $528). For the sale on July 30, 56 units are sold from the July 21 purchase (56 units at $7.20 = $403.20). Total COGS = $528 + $403.20 = $931.20.

Classic Floors Has the Following Inventory Data Assuming That a Perpetual Inventory System Is Used, What Is