Lois's Furniture uses a periodic inventory system.Lois sold 60 tables during August.Other data for August includes: $\begin{array} { | r | l | l | }
\hline \text { Aug. 1 } & \text { Balance } & 8 @ \$ 15 \
\hline 9 & \text { Purchased } & 12 @ 18 \
\hline 18 & \text { Purchased } & 60 @ 20 \
\hline
\end{array}$ Ending inventory under the LIFO method is:

Question

Lois's Furniture uses a periodic inventory system.Lois sold 60 tables during August.Other data for August includes: $\begin{array} { | r | l | l | } 
\hline \text { Aug. 1 } & \text { Balance } & 8 @ \$ 15 \
\hline 9 & \text { Purchased } & 12 @ 18 \
\hline 18 & \text { Purchased } & 60 @ 20 \
\hline
\end{array}$ Ending inventory under the LIFO method is:

Quizplus · Accepted Answer

Since Lois's Furniture uses the periodic inventory system, we don't have the exact cost of each table sold. Therefore, we need to use an inventory costing method to calculate the cost of goods sold and the value of ending inventory. Since the question asks for ending inventory under LIFO method, we assume that the latest units purchased are sold first.

To calculate the cost of goods sold, we need to know the total cost of units sold. We are only given the number of tables sold but not the cost of each table sold. So we cannot calculate the cost of goods sold.

To calculate the value of ending inventory, we can use the formula: Ending Inventory = Beginning Inventory + Purchases - Cost of Goods Sold. We know the tables sold (60), but we don't know the beginning inventory, purchases or cost of goods sold. However, we know that under LIFO method, the latest units purchased are sold first. So, the remaining inventory should consist of the oldest units purchased.

Assuming that the business does not produce tables but purchases them, the cost of the units will increase due to inflation or any other causes. In that case, the latest units purchased will have the highest cost and the oldest units will have the lowest cost. Assuming that the oldest units have a cost of $56 per table, we can calculate the cost of the remaining inventory as:

Cost of remaining inventory = 60 tables x $56 per table = $3,360

Therefore, the value of ending inventory under LIFO method is $336 (which is the cost of remaining inventory). Option B is the correct answer.

Lois's Furniture Uses a Periodic Inventory System Ending Inventory Under the LIFO Method Is: A)$1,200

Lois's Furniture Uses a Periodic Inventory System Ending Inventory Under the LIFO Method Is:
A)$1,200