Martin Inc. is a wholesaler of office supplies. The activity for supply number 47519 during October is shown below:

- Refer to Exhibit 7-6. If Martin Inc. uses a LIFO periodic inventory system, the ending inventory of supply number 47519 at October 31 is reported as

Question

Martin Inc. is a wholesaler of office supplies. The activity for supply number 47519 during October is shown below:

- Refer to Exhibit 7-6. If Martin Inc. uses a LIFO periodic inventory system, the ending inventory of supply number 47519 at October 31 is reported as

Quizplus · Accepted Answer

The LIFO periodic inventory system assumes that the last units purchased are the first ones sold. Therefore, the cost of goods sold for October is calculated by multiplying the number of units sold (7,000) by the cost of the most recent purchase (per unit cost of $21.60). This results in a cost of goods sold of $151,200. The ending inventory is calculated by subtracting the cost of goods sold from the cost of the goods available for sale. Therefore, the ending inventory for supply number 47519 at October 31 is reported as $146,400 ($297,600 - $151,200).