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

Question

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

Quizplus · Accepted Answer

LIFO (last-in, first-out) assumes that the most recently purchased inventory is sold first. Therefore, the ending inventory would consist of the beginning inventory (1,000 units at $7.20) and the first 1,300 units purchased (600 units at $7.25 and 700 units at $7.30). The total cost of the ending inventory would be 1,000 x $7.20 + 600 x $7.25 + 700 x $7.30 = $5,040.

Inventory Records for Marvin Company Revealed the Following: Marvin Sold