A company purchased 100 units for $20 each on January 31. It purchased 100 units for $30 on February 28. It sold 150 units for $45 each from March 1 through December If the company uses the last-in, first-out inventory costing method, what is the amount of cost of goods sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)

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Quizplus · Accepted Answer

Under the LIFO method, the last items purchased are the first to be sold. Therefore, the cost of goods sold includes 100 units at $30 each (from February 28 purchase) and 50 units at $20 each (from January 31 purchase), totaling $4,000 (100*$30 + 50*$20).

A Company Purchased 100 Units for $20 Each on January