Harris,Inc.had the following balances and transactions during 2017: $$\begin{array} { | l | l | }
\hline \text { Beginning Merchandise Inventory as of January } 1,2017 & 160 \text { units at } \$ 70 \
\hline \text { March } 10 & \text { Sold } 80 \text { units } \
\hline \text { Iune } 10 & \text { Purchased } 175 \text { units at } \$ 77 \
\hline \text { October } 30 & \text { Sold } 175 \text { units } \
\hline
\end{array}$$ What would be reported for Cost of Goods Sold on the income statement for the year ending December 31,2017 if the perpetual inventory system and the last-in,first-out inventory costing method are used?

Question

Harris,Inc.had the following balances and transactions during 2017: $$\begin{array} { | l | l | } 
\hline \text { Beginning Merchandise Inventory as of January } 1,2017 & 160 \text { units at } \$ 70 \
\hline \text { March } 10 & \text { Sold } 80 \text { units } \
\hline \text { Iune } 10 & \text { Purchased } 175 \text { units at } \$ 77 \
\hline \text { October } 30 & \text { Sold } 175 \text { units } \
\hline
\end{array}$$ What would be reported for Cost of Goods Sold on the income statement for the year ending December 31,2017 if the perpetual inventory system and the last-in,first-out inventory costing method are used?

Quizplus · Accepted Answer

Under the LIFO method, the last items purchased are the first to be sold. Therefore, the cost of goods sold would include the 175 units purchased on June 10 at $77 each and 80 units from the beginning inventory at $70 each. Calculation: (175 units x $77) + (80 units x $70) = $13,475 + $5,600 = $19,075.

Harris,Inc What Would Be Reported for Cost of Goods Sold on |