Eastview Company uses a perpetual LIFO inventory system, and has the following purchases and sales: $$\begin{array} { | l | l | }
\hline \text { January 1 } & 150 \text { units were purchased at \$9 per unit. } \
\hline \text { January 17 } & 120 \text { units were sold } \
\hline \text { January 20 } & 160 \text { units were purchased at \$11 per unit. } \
\hline \text { January 29 } & 150 \text { units were sold } \
\hline
\end{array}$$
- What is the value of cost of goods sold?
A) $2,670.
B) $2,750.
C) $2,730.
D) $380.
E) $440.

Question

Eastview Company uses a perpetual LIFO inventory system, and has the following purchases and sales: $$\begin{array} { | l | l | } 
\hline \text { January 1 } & 150 \text { units were purchased at \$9 per unit. } \
\hline \text { January 17 } & 120 \text { units were sold } \
\hline \text { January 20 } & 160 \text { units were purchased at \$11 per unit. } \
\hline \text { January 29 } & 150 \text { units were sold } \
\hline
\end{array}$$
- What is the value of cost of goods sold?
A) $2,670.
B) $2,750.
C) $2,730.
D) $380.
E) $440.

Quizplus · Accepted Answer

To calculate the cost of goods sold using LIFO, we need to start from the most recent purchase and work our way backwards until we have accounted for all units sold.

Calculate the cost of goods sold as follows:

- Starting inventory: 10 units at $150 = $1,500 
- Purchase #1: 20 units at $160 = $3,200 
- Purchase #2: 30 units at $170 = $5,100

Total inventory available for sale = 60 units

- Sales: 40 units

We need to remove the cost of goods sold for the 40 units sold.

- 20 units from Purchase #2 at $170 = $3,400 
- 20 units from Purchase #1 at $160 = $3,200

Total cost of goods sold = $6,600

Therefore, the answer is C) $2,730.

Eastview Company Uses a Perpetual LIFO Inventory System, and Has