The following information was taken from the inventory records of Hari Ltd.: $$\begin{array} { | l | l | }
\hline \text { Dates } & \text { Inventory units } \
\hline \text { Inventory - Feb 1 } & 100 \text { units at } \$ 3.00 \
\hline \text { Purchases - April 1 } & 300 \text { units at } \$ 3.10 \
\hline \text { Purchases - July 15 } & 200 \text { units at } \$ 3.20 \
\hline \text { Units available for sale } & 600 \text { units } \
\hline & \
\hline \text { Sales - May 10 } & 200 \text { units at } \$ 6.00 \
\hline \text { Sales - November 15 } & 100 \text { units at } \$ 6.10 \
\hline
\end{array}$$ What would be the cost of goods sold, assuming that the LIFO method is used in a perpetual inventory system?
A)$920
B)$930
C)$940
D)$950

Question

The following information was taken from the inventory records of Hari Ltd.: $$\begin{array} { | l | l | } 
\hline \text { Dates } & \text { Inventory units } \
\hline \text { Inventory - Feb 1 } & 100 \text { units at } \$ 3.00 \
\hline \text { Purchases - April 1 } & 300 \text { units at } \$ 3.10 \
\hline \text { Purchases - July 15 } & 200 \text { units at } \$ 3.20 \
\hline \text { Units available for sale } & 600 \text { units } \
\hline & \
\hline \text { Sales - May 10 } & 200 \text { units at } \$ 6.00 \
\hline \text { Sales - November 15 } & 100 \text { units at } \$ 6.10 \
\hline
\end{array}$$ What would be the cost of goods sold, assuming that the LIFO method is used in a perpetual inventory system?
A)$920
B)$930
C)$940
D)$950

Quizplus · Accepted Answer

Under the LIFO (Last-In, First-Out) method in a perpetual inventory system, the most recently purchased items are sold first. The cost of goods sold (COGS) calculation would be as follows:- Sales on May 10: 200 units sold. Since this is the first sale and it occurs after the April 1 purchase, we start with the July 15 purchase (which hasn't happened yet by May 10 in a real-time scenario, indicating a need for clarification in the question's timeline. However, following the LIFO logic strictly based on the provided transactions):  - 200 units @ $3.10 (from April 1 purchase) = $620- Sales on November 15: 100 units sold. These would come from the remaining inventory, starting with the most recent purchase before the sale:  - 100 units @ $3.20 (from July 15 purchase) = $320Adding these together: $620 (from May 10 sale) + $320 (from November 15 sale) = $940.Therefore, under the LIFO method, the cost of goods sold would be $940.

The Following Information Was Taken from the Inventory Records of Hari