Question

Melbourne Company uses the perpetual inventory system and LIFO cost flow method. Melbourne purchased 2,300 units of inventory that cost $15.50 each. At a later date, the company purchased an additional 2,400 units of inventory that cost $16.00 each. If the company sells 2,600 units of inventory, what amount of ending inventory will appear on a balance sheet prepared immediately after the sale

Answer 1

$32,550

Step-by-step explanation:

LIFO means last in first out. It means that it is the last purchased inventories are the first to be sold.

Total inventory = 2,300 + 2,400 = 4,700

Ending inventory = 4700 - 2600 = 2,100

The ending inventory would be the first purchased inventory

Ending inventory = 2100 x $15.50 = $32,550

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