Cement Company, Inc. began the first quarter with 1,000 units of inventory costing $25 per unit. During the first quarter, 3,000 units were purchased at a cost of $40 per unit, and sales of 3,400 units at $65 per units were made. During the second quarter, the company expects to replace the units of beginning inventory sold at a cost of $45 per unit. Cement Company uses the LIFO method to account for inventory.
What is the correct journal entry to record cost of goods sold at the end of the first quarter?
A) Option A
B) Option B
C) Option C
D) Option D
E) Option E

Question

Cement Company, Inc. began the first quarter with 1,000 units of inventory costing $25 per unit. During the first quarter, 3,000 units were purchased at a cost of $40 per unit, and sales of 3,400 units at $65 per units were made. During the second quarter, the company expects to replace the units of beginning inventory sold at a cost of $45 per unit. Cement Company uses the LIFO method to account for inventory.
What is the correct journal entry to record cost of goods sold at the end of the first quarter? 
A) Option A 
B) Option B 
C) Option C 
D) Option D 
E) Option E

Quizplus · Accepted Answer

3000 × $40 + 400 × $45 = $138,000 COGS