Melbourne Company uses the perpetual inventory method. Melbourne purchased 500 units of inventory that cost $4.00 each. At a later date the company purchased an additional 600 units of inventory that cost $5.00 each. If Melbourne uses a LIFO cost flow method, and sells 800 units of inventory, the amount of ending inventory appearing on the balance sheet will be:
A) $3,800.
B) $1.350.
C) $1,500.
D) $1,200.

Question

Quizplus · Accepted Answer

500 units + 600 units - 800 units sold = 300 units in ending inventory; 300 units × $4.00 = $1,200

Melbourne Company Uses the Perpetual Inventory Method