The Acme Corporation buys 300 units of merchandise in January at $5 each.Acme buys 500 units at $4 each in February and 200 units at $6 each in March.Acme sells 150 units during this quarter.Acme uses a periodic inventory system and had no beginning inventory.What is its cost of goods sold for the quarter using the LIFO method?

Question

Quizplus · Accepted Answer

Under LIFO, the last items purchased are the first to be sold. Acme sold 150 units, so using the LIFO method, the cost of goods sold would be 150 units from March at $6 each, totaling $900.

The Acme Corporation Buys 300 Units of Merchandise in January