Question

Beginning inventory, purchases, and sales data for tennis rackets are as follows: April 3 Inventory 11 units @ $15.00 11 Purchase 7 units @ $19.00 14 Sale 11 units 21 Purchase 17 units @ $22.00 25 Sale 14 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.

A-cost of goods sold $501.00 ending inventory $550.00

b-cost of goods sold $501.00 ending inventory $171.00

c-cost of goods sold $375.00 ending inventory $297.00

d-cost of goods sold $501.00 ending inventory $297.00

Answer 1

LIFO PERPETUAL INVENTORY SYSTEM

date	purchase	sales	PURCHASE BALANCE
April 3	11 unit * 15		165
11	7 unit * 19		133
14		11 unit ( 7 * 19)        ( 4 * 15 )         193
21	17 unit * 22		374
25		14 unit   ( 14 * 22)     308
	BALANCE	501	672

total purchase    672 = 165+133+ 374

COGS    501 = 308 + 193

ENDING INVENTORY     171 = 672 - 501

ANSWER IS ;

b-cost of goods sold $501.00 ending inventory $171.00