Question

A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is

Multiple Choice Question 95 Bonita Shutters has the following inventory information. Nov. 1 Inventory 8 Purchase 30 units @ $6.00 100 units @ $6.00 80 units @ $6.00 70 units @ $9.00 17 Purchase 25 Purchase A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is O $900. O $1703. O $1757. O $600. Click if you would like to Show Work for this question: Open Show Work

Answer 1

Under LIFO, the latest bought goods are presumed to be sold and hence ending inventory is the inventory which exists from the beginning. Since 100 units are on hand as on November 30, the 30 units from the beginning inventory and the 70 units from the purchase on November 8 are taken as ending inventory.

Periodic LIFO	Cost of Goods Available for Sale	Cost of Goods Sold	Inventory Balance
	# of units	Cost per unit	Cost of Goods Available for Sale	# of units sold	Cost per unit	Cost of Goods Sold	# of units in Ending Inventory	Cost Per Unit	Ending Inventory
Beginning Inventory November 1	30	$6	$180				30	$6	$180
Purchases
8-Nov	100	$6.00	$600	30	$6	$180	70	$6	$420
17-Nov	80	$6.00	$480	80	$6	$480
25-Nov	70	$9.00	$630	70	$9	$630
Total	280		$1,890	180		$1,290	100		$600

Ending Inventory under LIFO is $600

Correct Option: $600