Adam Inc.uses a perpetual inventory system. Jan.
$\begin{array}{rlr}
1 & \text { On hand, } 10 \text { units at } \$ 2 \text { each } & \$ 20 \
4 & \text { Sold } 8 \text { units for } \$ 10 \text { each } & 80 \
22 & \text { Purchased } 50 \text { units at } \$ 4 \text { each } & 200 \
26 & \text { Sold } 48 \text { units for } \$ 10 \text { each } & 480
\end{array}$ If Adam uses the LIFO method, how much is cost of goods sold for the month of January?
A) $208
B) $560
C) $204
D) $212

Question

Adam Inc.uses a perpetual inventory system. Jan. 
$\begin{array}{rlr}
1 & \text { On hand, } 10 \text { units at } \$ 2 \text { each } & \$ 20 \
4 & \text { Sold } 8 \text { units for } \$ 10 \text { each } & 80 \
22 & \text { Purchased } 50 \text { units at } \$ 4 \text { each } & 200 \
26 & \text { Sold } 48 \text { units for } \$ 10 \text { each } & 480
\end{array}$ If Adam uses the LIFO method, how much is cost of goods sold for the month of January?
A) $208
B) $560
C) $204
D) $212

Quizplus · Accepted Answer

LIFO (Last-In, First-Out) assumes that the most recently purchased units are the first to be sold. Therefore, the cost of goods sold for January is calculated as follows:48 units sold at $4 each (from the January 22 purchase) = $1928 units sold at $2 each (from the January 1 beginning inventory) = $16Total cost of goods sold = $192 + $16 = $208

Adam IncUses a Perpetual Inventory System If Adam Uses the LIFO Method, How Much Is Cost