Radical Radials Company has the following inventory data: $$\begin{array} { r l r r }
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 &330\
&&&\$3,000
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 48 units on hand.Using the LIFO inventory method the amount allocated to ending inventory for July is
A)$930
B)$912
C)$960
D)$1056.

Question

Radical Radials Company has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 &330\
&&&\$3,000
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 48 units on hand.Using the LIFO inventory method the amount allocated to ending inventory for July is
A)$930
B)$912
C)$960
D)$1056.

Quizplus · Accepted Answer

Under the LIFO method, the last items purchased are the first to be used. Therefore, the ending inventory consists of the oldest costs. The ending inventory of 48 units includes 30 units from the beginning inventory at $19 each and 18 units from the July 7 purchase at $20 each. Thus, the ending inventory is (30 units x $19) + (18 units x $20) = $570 + $360 = $930.

Radical Radials Company Has the Following Inventory Data A Physical Count of Merchandise Inventory on July 31 Reveals