Question

Maddox Company uses the perpetual inventory method. Maddox purchased 500 units of inventory that cost $2.00 each. At a later date the company purchased an additional 600 units of inventory that cost $2.50 each. If Maddox uses a LIFO cost flow method, and sells 800 units of inventory, the amount of ending inventory appearing on the balance sheet will be: $1,900. $675. $600. $750.

Answer 1

Ending inventory = $600

correct option is $600

Step-by-step explanation:

given data

inventory purchased = 500 units

inventory cost = $2.00

sells = 800 units

purchased additional = 600 units

cost = $2.50

solution

Number of ending inventory

Total Purchase = 500 + 600 = 1100

total Units sold = 800

so that Ending inventory units will be

Ending inventory units = 1100 - 800 = 300

so we can say that Ending inventory

Ending inventory = 300 units @ 2.00

Ending inventory = $600

correct option is $600