Inventory records for Marvin Company revealed the following: $$\begin{array} { c l c r }
\text { Date } & { \text { Transaction } } & \begin{array} { c }
\text { Number } \
\text { of Units }
\end{array} & \begin{array} { r }
\text { Unit } \
\text { Cost }
\end{array} \
\text { Mar. 1 } & \text { Beginning inventory } & 1,000 & \$ 7.20 \
\text { Mar. 10 } & \text { Purchase } & 600 & 7.25 \
\text { Mar. 16 } & \text { Purchase } & 800 & 7.30 \
\text { Mar. 23 } & \text { Purchase } & 600 & 7.35
\end{array}$$ Marvin sold 2,300 units of inventory during the month. Ending inventory assuming LIFO would be:

Question

Inventory records for Marvin Company revealed the following: $$\begin{array} { c l c r } 
\text { Date } & { \text { Transaction } } & \begin{array} { c } 
\text { Number } \
\text { of Units }
\end{array} & \begin{array} { r } 
\text { Unit } \
\text { Cost }
\end{array} \
\text { Mar. 1 } & \text { Beginning inventory } & 1,000 & \$ 7.20 \
\text { Mar. 10 } & \text { Purchase } & 600 & 7.25 \
\text { Mar. 16 } & \text { Purchase } & 800 & 7.30 \
\text { Mar. 23 } & \text { Purchase } & 600 & 7.35
\end{array}$$ Marvin sold 2,300 units of inventory during the month. Ending inventory assuming LIFO would be:

Quizplus · Accepted Answer

LIFO (last-in, first-out) assumes that the most recently purchased items are the first to be sold. Therefore, the ending inventory would consist of the beginning inventory and the first two purchases:1,000 units at $7.20 = $7,200600 units at $7.25 = $4,350800 units at $7.30 = $5,840Total ending inventory = $17,390Since the question asks for the ending inventory assuming LIFO, the correct answer is A) $5,040.

Inventory Records for Marvin Company Revealed the Following Marvin Sold 2,300 Units of Inventory During the Month