Given the following inventory activity,what is ending inventory using the perpetual LIFO costing method?

Question

Quizplus · Accepted Answer

Using the perpetual LIFO costing method, the last items purchased are considered the first ones sold. Here are the calculations:

- Sold 150 units @ $5.00 = 150 x $5.00 = $750
- Purchased 100 units @ $5.00 = $500
- Sold 75 units @ $3.50 = 75 x $3.50 = $262.50
- Purchased 50 units @ $3.50 = $175
- Purchased 40 units @ $6.00 = $240

The total cost of goods available for sale is $1155. Therefore, the ending inventory must be:

$1155 (total cost) - $750 (cost of goods sold) = $405 (ending inventory)

The ending inventory consists of 25 units @ $3.50, 40 units @ $6.00, and 100 units @ $5.00 for a total of 165 units @ $4.86. However, since the question asks for the "best choice," option B is the only one that matches this result.

Given the Following Inventory Activity,what Is Ending Inventory Using the Perpetual