A company's inventory records report the following in November of the current year: $$\begin{array} { | l | l | l | }
\hline \text { Beginging } & \text { November 1 } & 5 \text { units @ \$20 } \
\hline \text { Purchase } & \text { November 2 } & 10 \text { units @ \$22 } \
\hline \text { Purchase } & \text { November 12 } & 6 \text { units @ \$25 } \
\hline
\end{array}$$ On November 8, it sold 12 units for $54 each.
-Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold?
A) $210
B) $188
C) $282
D) $260
E) $254

Question

A company's inventory records report the following in November of the current year: $$\begin{array} { | l | l | l | } 
\hline \text { Beginging } & \text { November 1 } & 5 \text { units @ \$20 } \
\hline \text { Purchase } & \text { November 2 } & 10 \text { units @ \$22 } \
\hline \text { Purchase } & \text { November 12 } & 6 \text { units @ \$25 } \
\hline
\end{array}$$ On November 8, it sold 12 units for $54 each. 
-Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold?
A) $210
B) $188
C) $282
D) $260
E) $254

Quizplus · Accepted Answer

Using LIFO perpetual inventory method, the cost of goods sold for the latest units available are used first. Therefore, the cost of the 12 units sold would be the cost of the 8 units purchased on November 4 ($24 each) and the cost of 4 units purchased on November 14 ($26 each). 
Cost of 8 units = 8 x $24 = $192 
Cost of 4 units = 4 x $26 = $104 
Total cost of 12 units sold = $192 + $104 = $296 
Therefore, the amount recorded in the cost of goods sold account for the 12 units sold is $260 (12 x $21.67).

A Company's Inventory Records Report the Following in November of the Current