Pasquale has the following inventory information. $\begin{array}{rllr}
\text { July } 1 & \text { Beginning Inventory } & 20 \text { units at } \$ 19 & \$ 380 \
7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \
22 & \text { Purchases } & 10 \text { units at } \$ 24 & 240\
& & &\$2,020
\end{array}$ A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the LIFO inventory method the amount allocated to cost of goods sold for July is

Question

Pasquale has the following inventory information. $\begin{array}{rllr}
\text { July } 1 & \text { Beginning Inventory } & 20 \text { units at } \$ 19 & \$ 380 \
7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \
22 & \text { Purchases } & 10 \text { units at } \$ 24 &  240\
& & &\$2,020
\end{array}$ A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the LIFO inventory method the amount allocated to cost of goods sold for July is

Quizplus · Accepted Answer

Using the LIFO method, we assume that the most recently purchased items are the first ones sold. Therefore, the cost of goods sold will be calculated based on the cost of the 20 units purchased on July 23 and the 10 units purchased on July 30.

The cost of the 20 units purchased on July 23 is: 
20 units x $68 = $1360

The cost of the 10 units purchased on July 30 is: 
10 units x $72 = $720

Therefore, the total cost of goods sold for July is: 
$1360 + $720 = $2080

Since there were 50 units available for sale (20 from July 23 + 20 from July 8 + 10 from July 30), the cost per unit is: 
$1390 / 50 units = $27.80

Thus, the cost of goods sold for July is: 
30 units x $27.80 = $834

Therefore, the answer is D) $1440.

Pasquale Has the Following Inventory Information A Physical Count of Merchandise Inventory on July 31 Reveals