29 SiCo begins operations in 20X2 and uses the periodic meth

29. SiCo begins operations in 20X2 and uses the periodic method. SiCo\'s December 31, 20X2 ending inventory consists of 400 units bought in January, 20X2 @ $11. Its December 31, 20X3 ending inventory consists of $ 1,300 units. During January, 20X3, SiCo buys 1,800 units @ $14; in July, it buys 2,200 units @ $17; and in October, it buys 2,300 units @ $13. If SiCo uses LIFO, its 20X3 costs of goods is...

A.) $80,000 B.) $79,900 C.) $80,800 D.) $78,700

Solution

Answer

B ) 79900

ending inventory = beginning inventory + units purchased - units sold

1300 = 400 + 1800 + 2200 + 2300 - units sold

units sold = 6700 - 1300

= 5400

LIFO method

2300 * 13 = 29900

2200 * 17 = 37400

= 5400 - 2300 - 2000

= 900

= 900 * 14

=12600

cost of goods sold = 29900 + 37400 + 12600

= 79900