Use this information to answer the following question. A periodic inventory system is used.
Using LIFO,the cost assigned to ending inventory is
A) $1,740.
B) $4,056.
C) $1,332.
D) $4,464.

Question

Use this information to answer the following question.  A periodic inventory system is used.
Using LIFO,the cost assigned to ending inventory is
A) $1,740. 
B) $4,056. 
C) $1,332. 
D) $4,464.

Quizplus · Accepted Answer

In LIFO periodic inventory system, the cost of the most recent units purchased is assigned to ending inventory.

From the information given: 
Beginning inventory: 120 units @ $8 = $960 
Purchases: 
- 200 units @ $9 = $1,800 
- 150 units @ $10 = $1,500

Total units available for sale = 470

Sales = 340 units 
Ending inventory = 130 units

If we use LIFO, then the cost of the most recent purchases will be assigned to ending inventory.

Last in First Out (LIFO) ending inventory: 
130 units @ $10 = $1,300

Therefore, the cost assigned to ending inventory using LIFO is $1,300. Option C is the correct answer.

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