Roadside, Inc. had the following balances and transactions during 2018: $$\begin{array} { | l | l | }
\hline \text { Beginning Merchandise Inventory } & 40 \text { units at } \$ 70 \
\hline \text { March 10 } & \text { Sold } 38 \text { units } \
\hline \text { June } 10 & \text { Purchased } 80 \text { units at } \$ 80 \
\hline \text { October } 30 & \text { Sold } 74 \text { units } \
\hline
\end{array}$$ What is the amount of the company's ending Merchandise Inventory, as disclosed in the December 31, 2018 balance sheet, using the periodic LIFO inventory costing method?

Question

Roadside, Inc. had the following balances and transactions during 2018: $$\begin{array} { | l | l | } 
\hline \text { Beginning Merchandise Inventory } & 40 \text { units at } \$ 70 \
\hline \text { March 10 } & \text { Sold } 38 \text { units } \
 \hline \text { June } 10 & \text { Purchased } 80 \text { units at } \$ 80 \
\hline \text { October } 30 & \text { Sold } 74 \text { units } \
\hline
\end{array}$$ What is the amount of the company's ending Merchandise Inventory, as disclosed in the December 31, 2018 balance sheet, using the periodic LIFO inventory costing method?

Quizplus · Accepted Answer

Under the periodic LIFO (Last-In, First-Out) method, the most recent purchases are sold first. At the end of the year, the ending inventory consists of the oldest costs. Here's the calculation:1. Beginning inventory: 40 units at $70 = $2,8002. Purchased: 80 units at $80 = $6,4003. Sold: 38 units + 74 units = 112 units soldThe company had a total of 120 units (40 beginning + 80 purchased) and sold 112, leaving 8 units in ending inventory.Under LIFO, the ending inventory consists of the oldest units, so it includes:- 8 units from the beginning inventory at $70 each = 8 * $70 = $560Therefore, the ending inventory is $560.

Roadside, Inc What Is the Amount of the Company's Ending Merchandise Inventory