Eastview Company uses a periodic LIFO inventory system,and has the following purchases and sales:
-What is the value of cost of goods sold?
A)$2,730.
B)$2,750.
C)$2,670.
D)$440.
E)$380.

Question

Eastview Company uses a periodic LIFO inventory system,and has the following purchases and sales:  
-What is the value of cost of goods sold?
A)$2,730. 
B)$2,750. 
C)$2,670. 
D)$440. 
E)$380.

Quizplus · Accepted Answer

Using the periodic LIFO method, the cost of goods sold is calculated by taking the cost of the most recent inventory purchases, which in this case is $520 for the 15 units purchased on 12/27. The calculation is as follows:

Cost of goods sold = (10 x $50) + (5 x $52) = $500 + $260 = $760 
Ending inventory = (10 x $52) + (15 x $60) = $520 + $900 = $1,420

Therefore, the value of cost of goods sold is $760. Choice B is the closest option at $750.

Eastview Company Uses a Periodic LIFO Inventory System,and Has the Following