Given the following inventory data about a firm: * Beginning inventory 20 units at $50/unit * Purchased 10 units at $45/unit * Purchased 35 units at $55/unit * Purchased 20 units at $65/unit * Sold 60 units at $80/unit What is the inventory value at the end of the period using LIFO? A) $1,225. B) $1,575. C) $3,450. D) $1,375. Your answer: C was incorrect. The correct answer was A) $1,225. Ending inventory equals 20 + 10 + 35 + 20 − 60 = 25 of the first units purchased equals: (20 units)($50/unit) + (5 units)($45/unit) = $1,000 + $225 = $1,225 ***************************** Why did they choose to use the first purchase price, but NOT the BEGINNING inventory price???
Nm… didnt read carefully enough. I’m hallucinating.
Lifo means you deduct last bought items so you reduce the Purchased 35 units at $55/unit Purchased 20 units at 65/unit plus 5 units at 45 that would be your COGS For your inventory you have the remaining that is 5*45+20*50=1225
sorry I didn’t realise both posts were made by same person