question archive Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7
Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7
Subject:FinancePrice:2.87 Bought7
Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each. During the period, the company purchased inventory items as follows. Glasgow sold 220 units after purchase 3 for $17.00 each.
Purchase
No. of items
Cost
1
200
$ 9.00
2
150
$ 9.30
3
50
$ 10.50
Glasgow's ending inventory under LIFO would be: A) $2,730.
B) $2,460.
C) $2,220.
D) $1,950.
Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each. During the period, the company purchased inventory items as follows. Glasgow sold 220 units after purchase 3 for $17.00 each.
|
Purchase |
No. of items |
Cost |
|
1 |
200 |
$ 9.00 |
|
2 |
150 |
$ 9.30 |
|
3 |
50 |
$ 10.50 |
Glasgow's ending inventory under LIFO would be: A) $2,730.
B) $2,460.
C) $2,220.
D) $1,950.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer:
C )
Step-by-Step explanation
Ending inventory units = Beginning inventory units + First purchased units + Second purchased units + Third purchased units - Sales units
= 80 units + 200 units + 150 units + 50 units - 220 units
= 260 units
Under the LIFO method, the first purchased items are included in the ending inventory.
Ending inventory under the LIFO method = 80 units from the beginning inventory + (260 units - 80 units) from first purchases
= (80 units x $7.50) + ((260 units - 80 units) x $9.00)
= $600 + (180 units x $9.00)
= $600 + $1,620
= $2,220
