Belle Co. has beginning inventory of 12 sets of paints at a cost of $1.50 each. During the year, the store purchased 7 at $3.00, 8 at $3.25, and 12 at $3.50. By the end of the year 31 sets were sold. Using the LIFO method, the cost of ending inventory is:
A)$28.00
B)$12.00
C)$21.00
D)$3.50
E)None of these

Question

Quizplus · Accepted Answer

Using the LIFO method, the last items purchased are the first to be sold. Belle Co. sold 31 sets, so the ending inventory consists of the oldest 8 sets (12 initial sets - 4 sold from initial stock). These 8 sets are valued at the initial cost of $1.50 each, totaling $12.00.

Belle Co Has Beginning Inventory of 12 Sets of Paints at at a Cost