On June 1,beginning inventory consists of ten items that cost $100 each.On June 8,ten more items are purchased at $120 each.On June 12,fifteen items are sold for $200 each.On June 28,ten items are purchased at $130 each.Using perpetual LIFO,cost of goods sold for the month ended June 30 equals ________.

Question

Quizplus · Accepted Answer

Perpetual LIFO means that the most recent purchases are the first to be sold. Therefore, the cost of goods sold for the month ended June 30 is the cost of the 15 items sold on June 12 ($200 x 15 = $3,000) plus the cost of the 10 items purchased on June 28 ($130 x 10 = $1,300), for a total of $4,300. However, since the beginning inventory consisted of 10 items that cost $100 each, the cost of goods sold must be reduced by $1,000, resulting in a cost of goods sold of $3,300.

On June 1,beginning Inventory Consists of Ten Items That Cost