Harris Company had the following balances and transactions during 2014: $$\begin{array} { | l | l | }
\hline \text { Beginning Merchandise Inventory } & 100 \text { units at } \$ 75 \
\hline \text { March } 10 & \text { Sold } 50 \text { units } \
\hline \text { June } 10 & \text { Purchased } 200 \text { units at } \$ 80 \
\hline \text { October 30 } & \text { Sold } 150 \text { units } \
\hline
\end{array}$$ What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2014 if the perpetual, last-in, first-out costing method is used? Round your answer to two decimal places.

Question

Harris Company had the following balances and transactions during 2014: $$\begin{array} { | l | l | } 
\hline \text { Beginning Merchandise Inventory } & 100 \text { units at } \$ 75 \
\hline \text { March } 10 & \text { Sold } 50 \text { units } \
\hline \text { June } 10 & \text { Purchased } 200 \text { units at } \$ 80 \
\hline \text { October 30 } & \text { Sold } 150 \text { units } \
\hline
\end{array}$$ What would the Cost of Goods Sold be as reported on the income statement for the year ending December 31, 2014 if the perpetual, last-in, first-out costing method is used? Round your answer to two decimal places.

Quizplus · Accepted Answer

Under the LIFO method, the last items purchased are the first to be sold. Therefore, the 150 units sold on October 30 would come from the 200 units purchased on June 10 at $80 each, totaling $12,000. The 50 units sold on March 10 would come from the beginning inventory of 100 units at $75 each, totaling $3,750. The total Cost of Goods Sold is $12,000 + $3,750 = $15,750.

Harris Company Had the Following Balances and Transactions During 2014