Bailey Company uses a periodic inventory system and its inventory records contain the following information:

The company sold 1,000 units during June.There were no additional purchases or sales during the remainder of the year.The company had 500 units were in its ending inventory at the end of the year.
-Use the information above to answer the following question.If Bailey Company uses the LIFO costing method,what is the cost of its ending inventory?
A) $1,365
B) $1,494
C) $1,620
D) $2,835

Question

Bailey Company uses a periodic inventory system and its inventory records contain the following information:
  
The company sold 1,000 units during June.There were no additional purchases or sales during the remainder of the year.The company had 500 units were in its ending inventory at the end of the year.
-Use the information above to answer the following question.If Bailey Company uses the LIFO costing method,what is the cost of its ending inventory?
A) $1,365 
B) $1,494 
C) $1,620 
D) $2,835

Quizplus · Accepted Answer

The LIFO (Last-In, First-Out) method assumes that the last items added to inventory are the first ones to be used or sold. Therefore, the ending inventory is valued at the cost of the oldest inventory.

Bailey Company Uses a Periodic Inventory System and Its Inventory