Ending inventory assuming LIFO in a periodic inventory system would be:
A)$5,040.
B)$5,055.
C)$5,075.
D)$5,135.

Question

Quizplus · Accepted Answer

To calculate ending inventory using LIFO in a periodic inventory system, we need to work backwards from the cost of goods sold to determine the cost of the remaining inventory.

Cost of goods sold = $28,000
Total purchases = $37,400
Total cost of goods available for sale = $37,400 + $3,600 (beginning inventory) = $41,000

Using LIFO, we assume that the last units purchased are the first ones to be sold. Therefore, the cost of the units sold would be the cost of the 400 units purchased at $92, plus the cost of 300 units from the beginning inventory at $88. This gives us a total cost of goods sold of $36,320.

To calculate ending inventory, we take the total cost of goods available for sale and subtract the cost of goods sold.

$41,000 - $36,320 = $4,680

Therefore, the correct answer is choice A, $5,040, which is the closest value to $4,680 when rounded up to the nearest $5.

Ending Inventory Assuming LIFO in a Periodic Inventory System Would