Apple-A-Day Company has the following inventory data: $$\begin{array} { r l r r }
\text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \
7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \
22 & \text { Purchases } & 20 \text { units at } \$ 22 & 440\&&&\$4,180
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 50 units on hand.Using the LIFO inventory method the amount allocated to cost of goods sold for July is
A)$3170.
B)$3080.
C)$3110.
D)$3010.

Question

Apple-A-Day Company has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \
7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \
22 & \text { Purchases } & 20 \text { units at } \$ 22 & 440\&&&\$4,180
\end{array}$$ A physical count of merchandise inventory on July 31 reveals that there are 50 units on hand.Using the LIFO inventory method the amount allocated to cost of goods sold for July is
A)$3170.
B)$3080.
C)$3110.
D)$3010.

Quizplus · Accepted Answer

LIFO (last-in, first-out) assumes that the most recently purchased items are the first to be sold. Therefore, the cost of goods sold for July would be:20 units at $22 = $44030 units at $21 = $630Total cost of goods sold = $440 + $630 = $1,070Beginning inventory + Purchases - Ending inventory = Cost of goods sold$800 + $2,940 + $440 - $1,070 = $3,110

Apple-A-Day Company Has the Following Inventory Data A Physical Count of Merchandise Inventory on July 31 Reveals