Jameson, Inc. had the following balances and transactions during 2019: $$\begin{array} { | l | l | }
\hline \text { Beginning Merchandise Inventory as of January 1,2019 } & 240 \text { units at } \$ 72 \
\hline \text { March } 10 & \text { Sold } 60 \text { units } \
\hline \text { Iune } 10 & \text { Purchased } 175 \text { units at } \$ 79 \
\hline \text { October } 30 & \text { Sold } 175 \text { units } \
\hline
\end{array}$$ What would be reported for Cost of Goods Sold on the income statement for the year ending December 31, 2019 if the perpetual inventory system and the last-in, first-out inventory costing method are used?

Question

Jameson, Inc. had the following balances and transactions during 2019: $$\begin{array} { | l | l | } 
\hline \text { Beginning Merchandise Inventory as of January 1,2019 } & 240 \text { units at } \$ 72 \
\hline \text { March } 10 & \text { Sold } 60 \text { units } \
\hline \text { Iune } 10 & \text { Purchased } 175 \text { units at } \$ 79 \
\hline \text { October } 30 & \text { Sold } 175 \text { units } \
\hline
\end{array}$$ What would be reported for Cost of Goods Sold on the income statement for the year ending December 31, 2019 if the perpetual inventory system and the last-in, first-out inventory costing method are used?

Quizplus · Accepted Answer

Under LIFO, the last items purchased are the first to be sold. For the sales on March 10, 60 units are sold from the beginning inventory at $72 each. For the sales on October 30, 175 units are sold from the June 10 purchase at $79 each. The COGS is (60 units x $72) + (175 units x $79) = $4,320 + $13,825 = $18,145.

Jameson, Inc What Would Be Reported for Cost of Goods Sold on \begin{array}