Chase Company uses the perpetual inventory method. The inventory records for Chase reflected the following information: Assuming Chase uses a LIFO cost flow method, what is the amount of cost of goods sold for the sales transaction on January 18?
A)$1,150
B)$1,050
C)$1,070
D)$1,130

Question

Chase Company uses the perpetual inventory method. The inventory records for Chase reflected the following information:  Assuming Chase uses a LIFO cost flow method, what is the amount of cost of goods sold for the sales transaction on January 18?
A)$1,150 
B)$1,050 
C)$1,070 
D)$1,130

Quizplus · Accepted Answer

Under LIFO method, cost of goods sold is calculated by taking the cost of the most recent inventory purchases and working backwards until all units sold are accounted for. In this case, the cost of the inventory purchased on January 16 ($350) and January 17 ($720) are used to calculate the cost of goods sold for the sale on January 18. Therefore, Cost of Goods Sold = $350 + $720 = $1,070.

Chase Company Uses the Perpetual Inventory Method