Question

Determine the gross profit using the periodic inventory system and the LIFO inventory method, assuming that 18 units were sold at a sales price of $14. Date Item Units Cost Total January 1 Beginning inventory 5 $3 $15 January 12 Purchase 10 4 40 January 18 Purchase 8 5 40 Totals 23 $95 a.$182 b.$80 c.$172 d.$95

Answer 1

Answer:

C) $172

Explanation:

total revenue = 18 units x $14 per unit = $252

cost of goods sold using LIFO method:

Date             Item                                  Units         Cost          Total

January 1      Beginning inventory         5              $3             $15

January 12    Purchase                          10              $4            $40

January 18    Purchase                           8              $5             $40

Totals                                                     23

COGS = (8 x $5) + (10 x $4) = $40 + $40 = $80

revenue           $252

- COGS            ($80)

gross profit      $172