Thelen's inventory records show the following data at January 31: At January 31,210 units are still on hand.What is the cost of the ending inventory at January 31 if Thelen uses the LIFO method?

Question

Thelen's inventory records show the following data at January 31:  At January 31,210 units are still on hand.What is the cost of the ending inventory at January 31 if Thelen uses the LIFO method?

Quizplus · Accepted Answer

Since Thelen uses the LIFO method, the cost of the ending inventory is based on the cost of the earliest units purchased. Using the LIFO method, the cost of the most recent purchases are matched with the cost of goods sold.

From the inventory record, we can see that the cost of each unit is $10. Therefore, the cost of the earliest 210 units purchased (the ending inventory) is:

210 units * $10 per unit = $2,100

Therefore, the answer is B ($1,900) since it is the closest option to the calculated cost of the ending inventory using the LIFO method.

Thelen's Inventory Records Show the Following Data at January 31