A company uses a periodic inventory system sells a single product that had a beginning inventory of 5,000 units with a total cost of $35,000. Early in the year, 12,000 units were purchased at $9 each and 4,000 units were on hand at the end of the year. Using LIFO, what is the amount of Cost of Goods Sold A) $117,000 B) $91,000 C) $107,000 D) $115,000 solve

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Business

Bronson Frye

3 November, 13:46

A company uses a periodic inventory system sells a single product that had a beginning inventory of 5,000 units with a total cost of $35,000. Early in the year, 12,000 units were purchased at $9 each and 4,000 units were on hand at the end of the year. Using LIFO, what is the amount of Cost of Goods Sold A) $117,000 B) $91,000 C) $107,000 D) $115,000 solve

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Brenna Schmidt · Answer 1

D) $115,000

Explanation:

beginning 5,000 at cost of $ 35,000

purchase 12,000 at $9 each = $ 108,000

total units available for sale 17,000

ending (4,000)

sold units: 13,000

Under LIFO we first sale the newest units those are the purchased ones.

we will sale the 12,000 purchased unit - -> $108,000

13,000 - 12,000 = 1,000 there is still 1000 more unit to sale oso we take themfrom beginning inventory

and 1000 of the beginning inventory:

35,000 / 5,000 x 1,000 = 7,000

total cogs = 108,000 + 7,000 = 115,000