Checkers uses the periodic inventory system. For the current month, the beginning inventory consisted of 4,800 units that cost $12 each. During the month, the company made two purchases: 2,000 units at $13 each and 8,000 units at $13.50 each. Checkers also sold 8,600 units during the month. Using the LIFO method, what is the ending inventory?
A) $80,292.
B) $74,400.
C) $83,700.
D) $75,800.

Question

Quizplus · Accepted Answer

Under the LIFO (Last-In, First-Out) method, the most recently purchased items are sold first. The ending inventory is calculated using the oldest costs. Here's the calculation:1. Sold 8,600 units:   - First, 8,000 units @ $13.50 (most recent purchase) = $108,000   - Then, 600 units from the second purchase @ $13 = $7,8002. Remaining inventory:   - 1,400 units from the second purchase @ $13 = $18,200   - All 4,800 units from the beginning inventory @ $12 = $57,6003. Ending inventory = $18,200 (from the second purchase) + $57,600 (beginning inventory) = $75,800

Checkers Uses the Periodic Inventory System