Snug-As-A-Bug Blankets has the following inventory data: $$\begin{array} { r l c }
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 60 \
5 & \text { Purchases } & 180 \text { units at } \$ 56 \
14 & \text { Sale } & 120 \text { units } \
21 & \text { Purchases } & 90 \text { units at } \$ 58 \
30 & \text { Sale } & 84 \text { units }
\end{array}$$ Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?
A)$11,604
B)$11,544
C)$11,592
D)$11,832

Question

Snug-As-A-Bug Blankets has the following inventory data: $$\begin{array} { r l c } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 60 \
5 & \text { Purchases } & 180 \text { units at } \$ 56 \
14 & \text { Sale } & 120 \text { units } \
21 & \text { Purchases } & 90 \text { units at } \$ 58 \
30 & \text { Sale } & 84 \text { units }
\end{array}$$ Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?
A)$11,604
B)$11,544
C)$11,592
D)$11,832

Quizplus · Accepted Answer

Under LIFO, the last items purchased are the first to be sold. For the sale on July 14, 120 units are sold from the July 5 purchase (120 units at $56 = $6,720). For the sale on July 30, 84 units are sold from the July 21 purchase (84 units at $58 = $4,872). Total COGS = $6,720 + $4,872 = $11,592.

Snug-As-A-Bug Blankets Has the Following Inventory Data Assuming That a Perpetual Inventory System Is Used, What Is