Question

Sheffield has the following inventory information. July 1 Beginning Inventory 15 units at $20 $300 7 Purchases 65 units at $19 1235 22 Purchases 5 units at $25 125 $1660 A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the LIFO inventory method, the amount allocated to cost of goods sold for July is

Answer 1

Answer:

The amount allocated to cost of goods sold for July is $1,075

Explanation:

On July 31, there are 30 units on hand. Number of units the company sells in the month:

15+65+5-30 = 55 units

July 1 Beginning Inventory 15 units at $20 $300

July 7 Purchases 65 units at $19

July 22 Purchases 5 units at $25

Sheffield uses the LIFO inventory method. The LIFO is a method used to account value for inventory. Under the method, the last item of inventory purchased is the first one sold.

Cost of goods sold for July = 5 x $25 + 50 x $19 = $125 + $950 = $1,075