Radical Radials Company has the following inventory data: $$\begin{array} { r l r r }
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 & { 330 }\&&& { \$ 3,000 }
\end{array}$$ A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the LIFO inventory method, the amount allocated to ending inventory for July is
A)$930
B)$912
C)$960
D)$1,056.

Question

Radical Radials Company has the following inventory data: $$\begin{array} { r l r r } 
\text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \
7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \
22 & \text { Purchases } & 15 \text { units at } \$ 22 & { 330 }\&&& { \$ 3,000 }
\end{array}$$ A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the LIFO inventory method, the amount allocated to ending inventory for July is
A)$930
B)$912
C)$960
D)$1,056.

Quizplus · Accepted Answer

The LIFO (last-in, first-out) inventory method assumes that the most recently purchased items are the first to be sold. Therefore, the ending inventory is valued at the cost of the most recent purchases. In this case, the most recent purchases were 15 units at $22 each, for a total of $330. Therefore, the amount allocated to ending inventory for July is $330.

Radical Radials Company Has the Following Inventory Data A Physical Count of Merchandise Inventory on July 30 Reveals