Question

Splish Brothers Inc. uses a periodic inventory system. Details for the inventory account for the month of January 2022 are as follows:

		Units		Per unit price		Total
Balance, 1/1/2022		360		$6.00		$2160
Purchase, 1/15/2022		180		..6.40		1152
Purchase, 1/28/2022		180		..6.60		1188

An end of the month (1/31/2022) inventory showed that 290 units were on hand. If the company uses LIFO, what is the value of the ending inventory?

$1836

$1740

$1892

$2760

Answer 1

• Correct Answer = Option #2: $ 1,740 [Value of ending inventory]

LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	360	$                   6.00	$                        2,160.00	70	$                 6.00	$                     420.00	290	$                   6.00	$            1,740.00
Purchases:
15-Jan	180	$                   6.40	$                        1,152.00	180	$                 6.40	$                 1,152.00	0	$                   6.40	$                         -
28-Jan	180	$                   6.60	$                        1,188.00	180	$                 6.60	$                 1,188.00	0	$                   6.60	$                         -
TOTAL	720		$                        4,500.00	430		$                 2,760.00	290		$            1,740.00