A company had the following purchases and sales during its first year of operations: $\begin{array}{|l|l|l|}
\hline& \text { Purchases } & \text { Sales } \
\hline \text { January: } & 10 \text { units at } \$ 120 & 6 \text { units } \
\hline \text { February: } & 20 \text { units at } \$ 125 & 5 \text { units } \
\hline \text { May: } & 15 \text { units at } \$ 130 & 9 \text { units } \
\hline \text { September: } & 12 \text { units at } \$ 135 & 8 \text { units } \
\hline \text { November: } & 10 \text { units at } \$ 140 & 13 \text { units } \
\hline
\end{array}$ On December 31, there were 26 units remaining in ending inventory. Using the Periodic LIFO inventory valuation method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)
A)$5,470.
B)$3,200.
C)$5,130.
D)$5,400.
E)$8,670.

Question

A company had the following purchases and sales during its first year of operations: $\begin{array}{|l|l|l|} 
\hline& \text { Purchases } & \text { Sales } \
\hline \text { January: } & 10 \text { units at } \$ 120 & 6 \text { units } \
\hline \text { February: } & 20 \text { units at } \$ 125 & 5 \text { units } \
\hline \text { May: } & 15 \text { units at } \$ 130 & 9 \text { units } \
\hline \text { September: } & 12 \text { units at } \$ 135 & 8 \text { units } \
\hline \text { November: } & 10 \text { units at } \$ 140 & 13 \text { units } \
\hline
\end{array}$ On December 31, there were 26 units remaining in ending inventory. Using the Periodic LIFO inventory valuation method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)
A)$5,470.
B)$3,200.
C)$5,130.
D)$5,400.
E)$8,670.

Quizplus · Accepted Answer

Under the LIFO method, the last items purchased are the first to be sold. The ending inventory consists of the oldest purchases. The cost of goods sold (COGS) is calculated by summing the cost of the most recent purchases that match the number of units sold. Total units sold = 41. Using LIFO, COGS = (10 units at $140) + (12 units at $135) + (15 units at $130) + (4 units at $125) = $5,470.

A Company Had the Following Purchases and Sales During Its