Question

Inventory records for Marvin Company reveal the following: Date Transaction Number of Units Unit Cost Mar 1 Beginning Inventory 1,000 $7.20 Mar 10 Purchase 600 $7.25 Mar 16 Purchase 800 $7.30 Mar 23 Purchase 600 $7.35 Marvin sold 2,300 units of inventory during the month. Ending inventory assuming LIFO would be: A) $5,135 B) $5,075 C) $5,055 D) $5,040

Answer 1

D) $5,040

Step-by-step explanation:

LIFO represents last in first out. This means the last item bought is the first to be sold.

Since 2300 units were sold, subtracting from the last item bought

2300-600-800-600 = 300

Opening inventory or 1000 minus 300 = 700

700 x $7.2 = $5,040