Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month.Ending inventory assuming LIFO would be:
$$\begin{array} { | l | l | c | r | }
\hline \text { Date } & \text { Transaction } & \text { Number of Units } & \text { Unit Cost } \
\hline \text { Apr. } 1 & \text { Beginning inventory } & 500 & \$ 2.40 \
\text { Apr. 20 } & \text { Purchase } & 400 & 2.50 \
\hline
\end{array}$$

Question

Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month.Ending inventory assuming LIFO would be:
$$\begin{array} { | l | l | c | r | } 
\hline \text { Date } & \text { Transaction } & \text { Number of Units } & \text { Unit Cost } \
\hline \text { Apr. } 1 & \text { Beginning inventory } & 500 & \$ 2.40 \
\text { Apr. 20 } & \text { Purchase } & 400 & 2.50 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Under LIFO (Last In, First Out), the most recent purchases are sold first. Dunbar sold 700 units, so we subtract from the most recent purchase on Apr. 20 (400 units) and then from the beginning inventory. The ending inventory consists of 200 units from the Apr. 20 purchase (400 - 200) and 500 units from the beginning inventory, all at their respective costs. Ending inventory calculation: (200 units * $2.50) + (500 units * $2.40) = $500 + $1200 = $1700. However, the question asks for the number of units in the ending inventory, not the value. The ending inventory in units is 200 (from Apr. 20 purchase) + 500 (beginning inventory) = 700 units, which is not an option provided, indicating a misunderstanding in the question's intent. The correct interpretation should focus on the units left after the sales, which are 200 units from the April 20 purchase and all 500 units from the beginning inventory, totaling 700 units. However, this interpretation does not match the options given, suggesting a need to re-evaluate the calculation based on the information provided and the question's actual requirements. Given the error in the initial explanation, the correct approach is to calculate the ending inventory value or quantity based on the LIFO method correctly. Since the question's phrasing and provided options seem to misalign with the initial explanation, let's correct the oversight:Under LIFO, the last items purchased are the first ones sold. Dunbar sold 700 units, so we subtract from the most recent purchase on Apr. 20 (400 units) first, leaving 0 units from the Apr. 20 purchase and 200 units sold from the beginning inventory (500 units), which leaves 300 units from the beginning inventory as ending inventory. Therefore, the correct calculation for the ending inventory in terms of units under LIFO is 300 units, which is not directly reflected in the provided options, indicating a mistake in the initial response process.Revisiting the question and focusing on the provided options, it's clear there was a misunderstanding in the explanation process. The question likely seeks the value of the ending inventory or a different aspect not correctly addressed. Given the data and typical question intent around inventory calculations, the focus should be on correctly applying the LIFO method to determine the ending inventory's value or quantity, aligning with standard accounting practices. The provided options (A, B, C, D) suggest a numerical answer, but the explanation mistakenly navigated away from directly addressing those options based on the LIFO calculation. The correct response should align with LIFO principles, considering the sale of 700 units from the most recent purchases and the beginning inventory, then calculating the remaining inventory accordingly.

Inventory Records for Dunbar Incorporated Revealed the Following: Dunbar Sold