Question

Beginning inventory, purchases, and sales data for tennis rackets are as follows:

April 3	Inventory	11 units @	$17.00
11	Purchase	8 units @	$17.00
14	Sale	14 units
21	Purchase	17 units @	$21.00
25	Sale	11 units

Assuming the business maintains a perpetual inventory system and calculates the cost of goods sold and ending inventory using LIFO.

Select the correct answer.

cost of goods sold $425.00 ending inventory $255.00

cost of goods sold $469.00 ending inventory $211.00

cost of goods sold $469.00 ending inventory $525.00

cost of goods sold $469.00 ending inventory $255.00

Answer 1

Cost of Goods Sold = (8 Units * $ 17) +[ ( 14 Units - 8Units) * 17] + (11 Units * $ 21)

= $ 136+ 102+ 231

= $ 469.00

The ending inventory= ( 17 Units - 11 Units) *$ 21 + (11 Units - 6Units) *17

= $ 126+ $ 85

= $ 211.00

Hence the correct answer is :

cost of goods sold $469.00 ending inventory $211.00